2.3 KiB
Wyckoff Strategy Workflow Narratives
Accumulation → Markup
After a downtrend, smart money begins accumulating shares. The selling climax exhausts the remaining sellers, and a series of tests confirms supply has been absorbed. A Spring (shakeout) — if it occurs — grabs the last liquidity below the range before the markup begins. Not all accumulations feature a Spring; many move directly into markup.
Key price levels in an accumulation structure include: the level where the Secondary Test low marks the structure's lower extreme, the Automatic Rally high which identifies the first upper boundary, the Creek (resistance-turned-support after breakout), the Spring low (shakeout extreme used as initial stop reference), and the LPS pullback zone which offers the highest-conviction entry opportunity.
Distribution → Markdown
After an uptrend, smart money distributes holdings to the public. The buying climax exhausts demand, and tests confirm no new buying interest. An Upthrust (UTAD) — if it occurs — sweeps out the last buyers above the range before the markdown begins.
Key price levels in a distribution structure include: the Secondary Test high marking the structure's upper extreme, the Automatic Reaction low identifying the first lower boundary, the Creek (support-turned-resistance after breakdown), the UTAD high (shakeout extreme used as initial stop reference), and the LPSY bounce zone offering the highest-conviction short entry.
Re-accumulation / Redistribution Continuation
During an established trend, price pauses and develops a miniature accumulation (re-accumulation) or distribution (redistribution) structure. These represent a continuation of the trend rather than a reversal. The smaller structure within the larger trend offers high-probability entries with defined risk.
Re-accumulation follows a bullish trend — smart money absorbs the stock that has migrated to weaker hands during the prior advance. Redistribution follows a bearish trend — smart money continues distributing into bounces. The process is identical to accumulation/distribution; the only difference is that re-accumulation begins after a bullish move pauses, while accumulation begins after a bearish move stops. These continuation structures operate at a smaller scale within the parent trend.