Wyckoff Method

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Who is Richard D. Wyckoff?


Richard Demille Wyckoff (November 2, 1873 – March 19, 1934) was a stock market authority, founder and onetime editor of the Magazine of Wall Street (founding it in 1907), and editor of Stock Market Technique.


Wyckoff started as a stockbroker’s runner at the age of 15, became a brokerage firm auditor a few years later, and at age 25 opened his own brokerage firm. The Wyckoff Method he developed of technical analysis and speculation emerged from conversations, interviews and research of the successful traders of his time, Jesse Livermore, E. H. Harriman, James R. Keene, Otto Kahn, J.P. Morgan, and many other large operators of the day.

Wyckoff’s research claimed many common characteristics among the greatest winning stocks and market campaigners of the time. He analyzed these market operators and their operations, and determined where risk and reward were optimal for trading. He emphasized the placement of stop-losses at all times, the importance of controlling the risk of any particular trade, and he demonstrated techniques used to campaign within the large trend (bullish and bearish). The Wyckoff technique may provide some insight as to how and why professional interests buy and sell securities, while evolving and scaling their market campaigns with concepts such as the “Composite Operator”.

In the October 2002 issue of Stocks and Commodities magazine, Richard D. Wyckoff was regarded as one of the five “Titans of Technical Analysis” alongside Charles Henry Dow, Ralph Nelson Elliott, Wim Delbert Gann and Arthur A. Merrill. And many of Wyckoff’s basic tenets such as Concepts of Accumulation/Distribution and the Supremacy of Price and Volume in determining stock price movement have become de facto standards of technical analysis.

Wyckoff implemented his methods in the financial markets, and grew his account such that he eventually owned nine and a half acres and a mansion next door to the General Motors’ Industrialist, Alfred Sloan Estate, in Great Neck, New York (Hamptons).


wyckoff estate


Credit: WyckoffSMI

Source: https://cmtassociation.org/kb/richard-wyckoff/

What is Wyckoff Method?

The Method was originally developed by Richard D. Wyckoff during the 1930s. He was one of the largest Wall Street traders of his time and also the founder of "The Magazine of Wall Street". He developed a set of principles and techniques, which focused on analysing overall market Demand and Supply and trade alongside market professionals, also known as "Smart Money".


The 3 Laws of Wyckoff

  • Law of Supply and Demand
  • Law of Cause and Effect
  • Law of Effort and Result


Wyckoff's 5 Step Approach

  • Determine Present Position and Probable Future Trend of the Market
  • Select Stocks in Harmony with the Market
  • Select Stocks with a Cause that Meets your Trading Objective
  • Determine the stock’s Readiness to Move 
  • Time your Commitments with a Turn in the market