威科夫Wychcoff交易法

Terminology for the abbreviations

AR	Automatic rally or reaction
BC	Buying Climax
BOI	Backing up to ice
BTI	Breaking the ice
BUEC	Backup to edge of creek
CREEK	Critical support
FTI	First time over ice
ICE	Critical resistance
JAC	Jumping across the creek (or JOC)
LPS	Last point of Support (Demand)
LPSY	Last point of Supply
MD	Mark down
MU	Mark up
PS	Preliminary support (Demand)
PSY	Preliminary supply
SOS	Sign of strength
SOW	sign of weakness
ST	Secondary test
TSO	Terminal shake out (Spring)
TUT	Terminal thrust
UTAD	Up thrust after distribution
SC	Selling Climax
TR	Trading Range
UT	Up thrust

 

SCHEMATIC 1
Accumulation Schematic

Phases A through E: Phases through which the Trading Range passes as conceptualised by the Wyckoff method and explained in the text.
Lines A and B… define support of the Trading Range.
Lines C and D… define resistance of the Trading Range.
(PS) preliminary Support首次支撑位… is where substantial buying begins to provided pronounced support after a prolonged downmove Volume and spread widen and provide a signal that the downmove may be approaching its end.
(SC) Selling Climax卖出高潮… the point at which widening spread and selling pressure usually climaxes and heavy or panicky selling by the public is being absorbed by larger professional interests at prices near a bottom.
(AR) Automatic Rally自动反弹… selling pressure has been pretty much exhausted. A wave of buying can now easily push up prices which is further fuelled by short covering. The high of this rally will help define the top of the trading range.
(STs) Secondary Test(s)第二次测试… revisit the area of the Selling Climax to test the supply demand balance at these price levels. If a bottom is to be confirmed, significant supply should not resurface, and volume and price spread should be significantly diminished as the market approaches support in the area of the SC.
The “CREEK小河” is an analogy to a wavy line of resistance drawn loosely across rally peaks within the trading range. There are of course minor lines of resistance and more significant ones that will have to be crossed before the market’s journey can continue onward and upward.
Springs or Shakeouts(洗盘） usually occur late within the trading range and allow the market and its dominant players to make a definitive test of available supply before a markup campaign will unfold. If the amount of supply that surfaces on a break of support is very light (low volume), it will be an indication that the way is clear for a sustained advance. Heavy supply here will usually mean a renewed decline. Moderate volume here may mean more testing of support
and to proceed with caution. The spring or shakeout also serves the purpose of providing dominant interests with additional supply from weak holders at low prices.
Jump Across the Creek (JAC)跳过小河 is a continuation of the creek analogy of jumping resistance
and is a good sign if done on good spread and volume – a sign of strength (SOS).
Sign of Strength (SOS)强势信号… an advance on good (increasing) spread and volume.
Back Up (BU) to a Last Point of Support (LPS)最后支撑点 – a pull back to support (that was resistance) on diminished spread and volume after a SOS.
This is good place to initiate long positions or to add to profitable ones.
Note: A series of SOS’s and LPS’s is good evidence that a bottom is in place and Price
Markup has begun.

Distribution Schematics
Schematics 2 and 3 show us two model variations of distribution Trading Range.
Phases A through E…phases through which the Trading Range (TR) passes as conceptualised by the Wyckoff method and explained in the text.
(PSY) Preliminary Supply最初供应点…is where substantial selling begins to provide pronounced resistance after an upmove.Volume and spread widen and provide a signal that the upmove may be approaching its end.
(BC) Buying Climax买入高潮… is the point at which widening spread and the force of buying climaxes, and heavy or urgent buying by the public is being filled by larger professional interests at prices near a top.
(AR) Automatic Reaction自动回调… with buying pretty much exhausted and heavy supply continuing an AR follows the BC. The low of this selloff will help define the bottom of the Trading Range (TR).
(ST) Secondary Test(s)第二次测试… revisit the area of the Buying Climax to test the demand/supply balance at these price levels. If a top is to be confirmed, supply will outweigh demand and volume and spread should be diminished as the market approaches the resistance area of the BC.
(SOW) Sign of Weakness弱势信号… at point 10 will usually occur on increased spread and volume as compared to the rally to point 9. Supply is showing dominance. Our first “fall on the ice” holds and we get up try to forge ahead.
The ice冰面… is an analogy to a wavy line of support drawn loosely under reaction lows of the Trading Range. A break through the ice will likely be followed by attempts to get back
above it. A failure to get back above firm support may mean a “drowning” for the market.
(LPSY) Last Point of Supply最后的供应点… (Schematic 2/Point 11): after we test the ice(support) on a SOW, a feeble rally attempt on narrow spread shows us the difficulty the market is having in making a further rise. Volume may be light or heavy, showing weak demand or substantial supply. It is at these LPSY’s that the last waves of distribution are being unloaded before markdown is to begin.
Schematic 2/Point 13: after a break through the ice, a rally attempt is thwarted at the ice’s
surface (now resistance). The rally meets a last wave of supply before markdown ensues.
LPSY’s are good places to initiate a short position or to add to already profitable ones.
(UTAD) UPthrust After Distribution派发之后的上冲，向上洗盘… (See Schematic 3/Point 11). Similar to the Spring and Terminal Shakeout in the trading range of Accumulation, a UTAD may occur in a TR or distribution. It is more definitive test of new demand after a breakout above the resistance line of the TR and usually occurs in the latter stages of the TR.
If this breakout occurs on light volume with no follow through or on heavy volume with a breakdown back into the centre of the trading range, then this is more evidence that the TR was Distribution not Accumulation.This UTAD usually results in weak holders of short positions giving them up to more dominant interests, and also in more distribution to new, less informed buyers before a significant decline ensues.

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The Wyckoff Way

When you understand the Wyckoffian phases of the market, you can determine when to be in or out of the market. You begin to understand how the large accounts determining market the trend, change of trend and price action. Consider the below application of Wyckoffian terms to the modern day SP500.