Lesson / 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.
Course content is for learning and research only. It is not investment advice.
Read the Chapter ↗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↗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
