Learning Wyckoff Distribution as Redistribution
Updated
The purpose of this idea is to give beginner analysists a introduction to some key principles and methodology used in understanding the movement of price within markets. One of those key principles is Market Phases, and we also use the Wyckoff Method to help us understand these Market Phases further.
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What is Wyckoff Method & Intro to Distribution
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"One objective of the Wyckoff method is to improve market timing when establishing a position in anticipation of a coming move where a favorable reward/risk ratio exists.
In accumulation, the shares purchased outnumber those sold while, in distribution, the opposite is true. The extent of accumulation or distribution determines the cause that unfolds in the subsequent move out of the TR ."
Wyckoff Theory & Schematics give us clues to which probable direction the price may head out of the horizontal moving price structure.
Reaccumulation is the continuation of Accumulation whilst Redistribution is the continuation of Distribution.
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Distribution
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I have attached a cutout from "Stocks & Commodities V.32:8 (14-18): The Composite Man's Bull Market Campaign by Pruden, Fraser, Bogomazov for educational purposes.
In this picture, described is the characteristics of Wyckoff Distribution
In a Distribution Trading Range two of the key characteristics are the UTAD (Upwards Thrust & Distribution) above the Trading Range, and the SoW's Signs Of Weakness's with strong volume at the bottom end of the range, trapped buyers above the trading range.
Distribution is one of the 4 Market Phases which we will learn about at the end of the the writeup.
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Redistribution
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After Distribution, Comes Redistribution.
Where after a extended down move, a repeated sideways movement occurs which leads to another downwards thrust.
By using the characteristics and schematics to identify Distribution we can also identify Redistribution using the same methodology. This also works with Accumulation & Reaccumulation, by looking for the characteristics of Accumulation inside Reaccumulation. (Read further to understand this concept)
So as you can see on the CELR Chart the characteristics almost match the picture Distribution identically, we can see at the Upper Range every time a breakout occurs it is quickly shut down by sellers indicating a strong presence of Supply. Eventually the UTAD occurs where buyers are trapped which is then followed by the price cascading down. The only difference is that this is a potential Redistribution instead of Distribution.
Redistribution is something many analysts struggle with and can be difficult to identify.
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Using Market Phases to gain further understanding of the Market Direction:
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The four Market Phases are.
Accumulation
Reaccumulation
Distribution
Redistrubution
Market Phases explained further: (Dont Miss This Idea If You Are A Beginner!)
(Additonal Infographic)
ibb.co/6R334CZ
Now looking at the LONG TERM chart for CELR, we can see the current trading range of the Above idea (Marked in orange on the current chart below) is potentially Redistribution.
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Further Reading & Similar Ideas
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Learning Wyckoff Redistribution:
Learning Distribution:
For more information check out Stockcharts.com, Wyckoff Introduction & Tutorial for beginners.
school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_method
Distribution Schematic:
school.stockcharts.com/lib/exe/fetch.php?media=market_analysis:the_wyckoff_method:wyckoffdistribution2.png
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Final Thoughts
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By using the Wyckoff Methodology to look deeper into our Trading Ranges we can potentially have more clues in successfully identifying the 4 Market Phases described above.
So far our clues are showing us this current trading range on CELR may be showing weakness and probability of lower prices. Unless CELR manages to get back above the 0.075c area with strong Buying volume lower prices are probable here.
If found the idea insightful you can show your appreciation by sharing it or giving it a like, feel free to leave your thoughts and criticisms in the comments and thank you for reading!
------------------------------------------------------------------
What is Wyckoff Method & Intro to Distribution
------------------------------------------------------------------
"One objective of the Wyckoff method is to improve market timing when establishing a position in anticipation of a coming move where a favorable reward/risk ratio exists.
In accumulation, the shares purchased outnumber those sold while, in distribution, the opposite is true. The extent of accumulation or distribution determines the cause that unfolds in the subsequent move out of the TR ."
Wyckoff Theory & Schematics give us clues to which probable direction the price may head out of the horizontal moving price structure.
Reaccumulation is the continuation of Accumulation whilst Redistribution is the continuation of Distribution.
------------------------------------------------------------------
Distribution
------------------------------------------------------------------
I have attached a cutout from "Stocks & Commodities V.32:8 (14-18): The Composite Man's Bull Market Campaign by Pruden, Fraser, Bogomazov for educational purposes.
In this picture, described is the characteristics of Wyckoff Distribution
In a Distribution Trading Range two of the key characteristics are the UTAD (Upwards Thrust & Distribution) above the Trading Range, and the SoW's Signs Of Weakness's with strong volume at the bottom end of the range, trapped buyers above the trading range.
Distribution is one of the 4 Market Phases which we will learn about at the end of the the writeup.
------------------------------------------------------------------
Redistribution
------------------------------------------------------------------
After Distribution, Comes Redistribution.
Where after a extended down move, a repeated sideways movement occurs which leads to another downwards thrust.
By using the characteristics and schematics to identify Distribution we can also identify Redistribution using the same methodology. This also works with Accumulation & Reaccumulation, by looking for the characteristics of Accumulation inside Reaccumulation. (Read further to understand this concept)
So as you can see on the CELR Chart the characteristics almost match the picture Distribution identically, we can see at the Upper Range every time a breakout occurs it is quickly shut down by sellers indicating a strong presence of Supply. Eventually the UTAD occurs where buyers are trapped which is then followed by the price cascading down. The only difference is that this is a potential Redistribution instead of Distribution.
Redistribution is something many analysts struggle with and can be difficult to identify.
------------------------------------------------------------------
Using Market Phases to gain further understanding of the Market Direction:
------------------------------------------------------------------
The four Market Phases are.
Accumulation
Reaccumulation
Distribution
Redistrubution
Market Phases explained further: (Dont Miss This Idea If You Are A Beginner!)
(Additonal Infographic)
ibb.co/6R334CZ
Now looking at the LONG TERM chart for CELR, we can see the current trading range of the Above idea (Marked in orange on the current chart below) is potentially Redistribution.
------------------------------------------------------------------
Further Reading & Similar Ideas
------------------------------------------------------------------
Learning Wyckoff Redistribution:
Learning Distribution:
For more information check out Stockcharts.com, Wyckoff Introduction & Tutorial for beginners.
school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_method
Distribution Schematic:
school.stockcharts.com/lib/exe/fetch.php?media=market_analysis:the_wyckoff_method:wyckoffdistribution2.png
------------------------------------------------------------------
Final Thoughts
------------------------------------------------------------------
By using the Wyckoff Methodology to look deeper into our Trading Ranges we can potentially have more clues in successfully identifying the 4 Market Phases described above.
So far our clues are showing us this current trading range on CELR may be showing weakness and probability of lower prices. Unless CELR manages to get back above the 0.075c area with strong Buying volume lower prices are probable here.
If found the idea insightful you can show your appreciation by sharing it or giving it a like, feel free to leave your thoughts and criticisms in the comments and thank you for reading!
Note
Price dropped from 0.50 to 0.31, Now we are changing into a Bullish Structure, and this idea is over, thank you for following.
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