forked from animatedread/Warrior_EA
14 lines
1.3 KiB
Markdown
14 lines
1.3 KiB
Markdown
## The Three Laws (Part 3, Ch.9–11)
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### 1. Law of Supply & Demand
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Price moves in the direction of the imbalance. When demand exceeds supply, price rises. When supply exceeds demand, price falls. Wyckoff events are expressions of these imbalances.
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### 2. Law of Cause & Effect
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The width and duration of an accumulation or distribution range (the *cause*) determines the extent of the subsequent markup or markdown move (the *effect*). A wider range with longer development produces a larger projected move. This is measured through Point & Figure count projections and structural range height.
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Both are implemented in `ADWyckoffEventStream` v5.6: structural range height as `TargetLong`/`TargetShort`, the Point & Figure horizontal count as `PFCount`/`TargetLongPF`/`TargetShortPF`. Only the horizontal count responds to duration.
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### 3. Law of Effort vs Result
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Volume is the *effort* and price movement is the *result*. When volume and price move in harmony, the trend is healthy. When volume diverges from price (high volume with little price progress, or low volume with large price moves), exhaustion or reversal is imminent. This law can be assessed at multiple scales: within a single candle, in the subsequent displacement, across complete movements, by wave (Weis Wave), and when approaching key levels.
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