WY-01-04
The Law of Cause and Effect: Trading Ranges and Subsequent Moves
First Principles
Sam Rivera
Full Chapters / WY-01-04
Wyckoff’s law of cause and effect calls the horizontal preparation process the “cause” and the directional movement after price leaves that structure the “effect.” It describes how a preceding trading range can provide an estimate of subsequent movement as a market shifts from balance to imbalance. Cause-and-effect analysis concerns the amount of horizontal price activity formed within the structure, not waiting time itself.
The course video is not yet available. This interface demo uses a separate MT animation, not the lesson video.
Read the Chapter ↗Demo timestamps
7 lessons · Chapter contents
01The Basic Meaning of Cause and Effect↗02How a Trading Range Develops Potential Movement↗03The Role of Point-and-Figure Charts↗04Horizontal Count, Duration, and Range Width↗05Why “Longer Sideways Means More Upside” Is Insufficient↗06Preconditions and Parameters for Target Estimation↗07From Range Identification to Trading Use↗The course transcript will be available with the finished video. The captions below belong to the interface demo.
Observe the market: start with context and place price within its structure.
Understand structure: compare supply and demand, and let evidence support or revise your hypothesis.
Form a view: define risk limits and know when to reassess.
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What the Wyckoff Method Studies
The Composite Operator Model and Strategic Interaction in Trading
