Wyckoff Accumulation is the phase where institutional operators quietly buy large positions without driving price up. The schematic includes: Preliminary Support (PS), Selling Climax (SC), Automatic Rally (AR), Secondary Test (ST), Spring/Shakeout, Sign of Strength (SOS), Last Point of Support (LPS), and the eventual Markup phase.
PS: first significant buying after prolonged downtrend. SC: high-volume capitulation selling. AR: automatic bounce. ST: retest of SC area with declining volume. Spring: false breakdown below the trading range. SOS: strong rally with expanding volume. LPS: last pullback before markup. Volume must drive analysis.
Spring or Phase C shakeout with volume dry-up on the test, SOS breaking above the trading range resistance, LPS pullback to broken resistance (now support), Volume expansion on rallies, contraction on pullbacks
Initial stop below the Spring/shakeout low, Trail stops using LPS and rising support, Target the measured move (range height projected upward from breakout)
Daily for accumulation identification, 4H for entry timing, 1H for Spring setups
Accumulation can take weeks to months. Patience is essential. Many false springs occur — always wait for the SOS breakout and LPS test for confirmation.
Wyckoff Distribution is the phase where institutional operators sell their accumulated positions into retail buying pressure. Key events include: Preliminary Supply (PSY), Buying Climax (BC), Automatic Reaction (AR), Secondary Test (ST), Upthrust After Distribution (UTAD), Sign of Weakness (SOW), and Last Point of Supply (LPSY).
The Composite Man is Wyckoff's conceptual framework for understanding market manipulation. Wyckoff proposed viewing the market as if a single, all-powerful operator orchestrates every move — accumulating at low prices, marking up, distributing at high prices, and marking down. While no single entity controls the market, aggregating institutional behaviour creates patterns that appear coordinated.
The Wyckoff Market Cycle consists of four phases that repeat across all markets and timeframes: Accumulation (smart money buying), Markup (trending up), Distribution (smart money selling), and Markdown (trending down). Understanding which phase the market is in helps traders align with institutional flow.
The Spring is a false breakdown below accumulation range support designed to trigger stop losses and create a liquidity pool for institutional buying. The Upthrust (UTAD) is the mirror — a false breakout above distribution range resistance that traps breakout buyers. Both are liquidity engineering events.