By reading the article “What is the Wyckoff Pattern?” published in Adaas Investment Magazine, you will get acquainted with the famous Wyckoff pattern and its phases in general. This level of familiarity can be enough when you need educational information about this topic.

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Wyckoff’s analysis pattern has been able to provide good performance in competition with other patterns such as the head and shoulders pattern or the double ceiling, and for this reason, it has been able to gain high popularity among traders and investors. In the following, we have prepared for you a review of the Wykoff pattern and its phases.

History of the Wyckoff Pattern

In 1930, Richard Demille Wyckoff, who was one of the masters of trading in the financial markets, introduced a new pattern in the field of technical price analysis. Along with other well-known people such as Elliott and Merrill, Wyckoff is introduced as the genius of financial market analysis and especially technical price analysis.

What is the Wyckoff Pattern?

Mr. Wyckoff has considered the following rules for developing his analytical pattern:

Supply and Demand

We use this principle to describe the balance of supply and demand in markets, which is very easy to understand.

Action and result

According to Richard Wyckoff, price changes are due to taking a series of actions and as a result of them changing the direction of the price movement.

Cause and Effect

Richard Wyckoff believed that nothing randomly happens, especially the ratio of supply and demand in financial markets, and there are logical reasons behind all of them.

Phases of Wyckoff Pattern

Wyckoff considers a market cycle containing 4 phases, which are:
Accumulation
Uptrend
Distribution
Downtrend