Wyckoff Simplified (ELI5): Wyckoff Method is a trading strategy that combines supply/demand dynamics with market psychology.
Best Timeframes for Wyckoff
Wyckoff method works best on mid- to long timeframes:
- Intra-day trading (holding positions at least overnight)
- Swing trading (holding position until a reversal)
- Long term investing (up to multi-year)
Wyckoff Trading Strategies
Wyckoff method for ranging markets
A famous trading method for making sense of a sideways market. You have probably heard the terms - distribution, accumulation, reaccumulation, redistribution.
Wyckoff used supply and demand laws together with basic market psychology cliches.
The resulting Wyckoff method is a way to anticipate the future bias of the market. That is, whether it will be bullish or bearish once it emerges out of its sideways action.
Wyckoff method for asset picking (Avoidance Strategy)
The avoidance strategy is a method of choosing which asset out of a given industry to trade and which to leave be.
It gives your trading strategy better chances of success. Additionally, it draws insights on the state of the whole industry (here for instance cryptocurrencies, or if you want to go niche, defi for example) from the behavior of the strongest asset and the weakest asset.
This approach is again based on market psychology, more specifically on the changes in speculative trading asset preferences with broader changes in the industry.
…In plain English, speculative shitcoins get bailed on first.
This effect can be used to work out market timing for longer-term positions.
Where to chart Wyckoff patterns
Wyckoff ranges can be drawn with the help of TA tools available on TradingView, even with the free plan. You will find all you need in the public indicator library.
If you are not afraid of crypto basket indices and some heavier data processing, take a look at our writeup on Timing Tools in ATNET Strategy