Wyckoff Accumulation & Distribution

A walkthrough of how to set this up and trade it!

Hello Satoshi Snipers!

Above you’ll find a walkthrough of how I setup Wyckoff Accumulation / Distribution ranges for my trades. I mention this briefly in the video but once you learn this technique and system you’ll start seeing “mini-koffs” literally everywhere!

This isn’t necessarily a bad thing but you can over-expose yourself here — make sure to find confluence with harmonics, EW, and many other techniques to ensure a successful trade. As Richard DeMille Wyckoff (1873-1934) once said:

There are those who think they are studying the market — what all they are doing is studying what someone has said about the market… not what the market has said about itself.

So, don’t take my word for it! Study the sequence and then consider it a powerful tool in your trading toolkit.

There a handful of resources in the Trading Library that capture the Wyckoff Method but this one here should get you started if you want some decent reading. I cover the stage of accumulation and the same thing applies in distribution, just reverse (you could literally turn it upside down).

The key is finding the “selling” or “buying” climax candle on either side and then you’ll start building your range to trade. You can even begin to predict what will happen to price as it hits it’s head on the ceiling of the Darvas Box or finds support and bounces on the bottom. Like setting up a Fibonacci-centric range this builds a larger framework for where those trades might be in larger context.

Here are some of my personal notes from when I first started learning about this system; I’m grateful and happy to say that my notes — and the system itself — has proven to be very, very profitable. I’ve added a few more thoughts as well:

  • Wyckoff + Fibs + Fundamentals works! Especially if it respects the Fibonacci then you have clear entry opportunities.

  • The .618 (“Golden Pocket”) is the most common for retracement. 1.618 is high-performance while the other key levels are (.382, .5, .618, 1, 1.618, 2.618, 4.236, 7).

  • Selling climax is where strong demand wick appears, at least 25% of the candle (or longer). This isn’t always the case but it makes it easier to spot.

  • Automatic reaction is the sell-off candle, usually immediate and represents a buying rally. This may or may not have a supply wick at the top / bottom. Put the trend lines on the climax and automatic reaction wicks.

  • Down thrusts (“test”) is selling that exits the bottom of the range, pulling back into the range. Shakeout candles, mostly but watch for a Sign of Strength; it’ll be visible and apparent with repeated pull-backs into range.

  • Up thrusts (“test”) are buyers rallying into supply, outside of the top of the range. Shadows are 25% or bigger and represents supply being dump as smart sellers “sell into strength”; sign of weakness when repeated pull-backs into the range.

  • Last point of supply (or “support”) forms near the top of the ceiling of the range (or on top). Small “cup and handle” begins to form to confirm the base. Higher lows all the way through as price accumulates before Sign of Strength into markup / distribution where “markup” are up candles from the Last Point of Supply.

  • Backup Supply is re-accumulation after the Last Point of Supply, rolls over, a larger cup with higher-lows into a buying climax.

Notes from February, 2022. Not that long ago!

Good luck and let me know if you have any questions! I’ll be in Discord. Follow on Twitter as well for updates!

To infinity & bitcoin,

— 8ɃIT