🐯 Learning Wyckoff Accumulation with Tiger Brokers
Hello tigers! With the Mooncake festival just around the corner, I'm delighted to share that Tiger Brokers has brought a smile to my face with a gift that adds warmth and joy to my Mid-Autumn Festival. More about that later. [Smart]
Today, let's focus on introducing the Wyckoff Accumulation phase.
Wyckoff Accumulation Phase
The Wyckoff Accumulation phase is a key pattern in technical analysis, particularly for longer-term investors. Developed by Richard D. Wyckoff, it aims to identify the accumulation of shares by informed investors before a significant price move.
This phase signifies a period in which institutional or informed investors strategically accumulate shares of a stock, often at lower price levels. This phase is characterized by a consolidation of prices within a well-defined trading range, typically forming a horizontal or slightly upward-sloping pattern. As the Accumulation phase progresses, there's a tendency for trading volume to decline, signaling reduced selling pressure. Ultimately, this phase concludes with a notable breakout to the upside, indicating the potential onset of an uptrend. The breakout is further validated when accompanied by an increase in trading volume, affirming the authenticity of the Accumulation phase.
PS - Preliminary Support: This is where the stock's price has been falling for a while, but now, there's some significant buying happening. It's like the first sign that the downward trend might be slowing down. The trading volume increases, and the price starts to spread out a bit, suggesting that the price drop might be nearing its end.
SC - Selling Climax: This is the point where the intense selling pressure reaches its peak. It's when many people are panicking and selling their shares. But, at this moment, larger, more experienced investors step in and start buying. Often, the price will close higher than the lowest point of the day. This indicates that the big players are absorbing the panic selling.
AR - Automatic Rally: After the panic selling of the selling climax, there's usually a rapid bounce-back in prices. It happens because the intense selling pressure has eased, and now, buying becomes more dominant. This rally is also fueled by people who had bet against the stock (short-sellers) buying to cover their positions. The highest point of this rally helps set the upper boundary of an accumulation trading range.
ST - Secondary Test: This is when the price revisits the area of the Selling Climax to see if there's still a balance between supply (people selling) and demand (people buying). If this is a true reversal, you'd expect the volume and price spread to be lower compared to the Selling Climax. Sometimes, there are multiple Secondary Tests after a Selling Climax.
Springs and Shakeouts: These are tactics used by big investors to test the market. A "spring" is when the price briefly drops below the previous trading range's low but then reverses and closes within that range. It tricks people into thinking the stock will keep falling and allows big investors to buy more at lower prices. A "shakeout" is similar but can happen after a price rise. It's a rapid drop meant to scare retail traders and investors into selling their shares to big players.
Test: Large investors frequently test the market for supply. This means they check if there are still many sellers around. If there's a lot of supply, it suggests the market isn't ready for a price increase. Successful tests, where prices make a higher low with lower volume, often indicate that further price increases are likely.
SOS - Sign of Strength: This is a price increase that happens on higher trading volume and with a wider price spread. It often occurs after a spring, confirming the analyst's interpretation that the previous action was indeed a spring.
LPS - Last Point of Support: This is the lowest point of a price pullback after a Sign of Strength. Essentially, it's a temporary drop in price but usually doesn't go below the previous resistance level. It's a sign that the stock is holding up well.
BU - Back-Up: This term refers to a phase where prices pull back a bit after a Sign of Strength. It's like taking a step back before making a big jump. It can take various forms, like a simple price pullback or even a new trading range at a higher level.
Now, let's look at a hypothetical stock with a Wyckoff Accumulation phase:
Could you guess which stock this is based on the chart?
It’s $Tiger Brokers(TIGR)$!!! Did you guess it right? [Sly]
In this example, you can observe the accumulation of shares within a trading range, followed by a breakout to the upside, indicating a potential uptrend. Is it time to buy more TIGR? [Tongue]
Remember that the Wyckoff Accumulation phase is a valuable tool in technical analysis, but like all patterns, its accuracy depends on various factors. It should be used in conjunction with other analysis techniques, and the broader market context should be considered when making investment decisions.
Thank You Note
I'm delighted to share my investing journey on this platform, and I'm committed to continuing this journey with all my readers. A big thank you to the Tiger Brokers community, including Tiger Brokers employees @CaptainTiger @MillionaireTiger @TigerStars @Daily_Discussion @Trend_Radar @Tiger_comments @TigerEvents @Tiger_Earnings for your unwavering support and for sharing my posts. [Bless]
I noticed some of these fantastic gifts were in the "Redeem Gifts" section, but they disappeared before I had the chance to exchange them. I'm thrilled to have received all of them now! [Great]
This stylish umbrella will keep me covered in both sunny and rainy weather!
This Tiger Brokers Rubik's Cube will keep me entertained while I patiently wait for the market to open!
I like the use of candlestick markings on the bottle to indicate the water volume.
Once again, I would like to thank everyone for your support! Your engagement means a lot to me, and I look forward to more discussions and insights ahead! [Happy]
I received 88k likes during August! [Surprised]
Disclaimer: The information provided in this post is for informational purposes only and should not be considered as financial advice. This post reflects my personal opinions and should not be considered as financial advice. Investment is subject to significant risk, including the potential loss of capital. Always conduct thorough research before making any investment decisions. [Observation]
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.