| In the Wyckoff Course, Wyckoff teaches that the | | | | not being traded can have an influence on the action |
| most important thing anyone can know about a | | | | in the trend that is being traded. However, positions |
| market or an individual issue is its trend and the | | | | should be opened, held and closed based solely on |
| position that it occupies in the trend. The trend is the | | | | developments in the trend being traded. Wyckoff |
| line of least resistance. It indicates the direction in | | | | would frown on the idea of using the fact that the |
| which the price wants to move. Profits are more | | | | long term trend is up to justify taking a short term |
| likely to be realized when positions are established | | | | position on the long side, or any other combination of |
| that are in harmony with the direction in which the | | | | using the direction of one trend to justify a trade in a |
| price has already indicated it wants to move. | | | | different trend. |
| Once a trend has been established, the future trend | | | | To be used effectively, trends must be defined |
| is likely to be the same as the current trend until the | | | | correctly. Wyckoff tells us that trends are defined by |
| price reaches a position in that trend or exhibits price | | | | two consecutive support points or resistance points |
| and volume action that indicates that a change in the | | | | of equal importance. An up trend traditionally is |
| direction of the trend should be anticipated. | | | | defined by two support points. Down trends are |
| Wyckoff classifies trends by the direction in which | | | | defined by two supply points. Trading ranges may be |
| they point and by the duration for which they | | | | defined by support points or resistance points |
| endure. From the standpoint of direction, trends are | | | | depending whether they develop after the |
| either up, down or neutral also known as a trading | | | | completion of an advance or the completion of a |
| range. Up trends are best suited for long positions. | | | | decline. Support points combine to form demand line |
| Down trends are best suited for short positions. | | | | for up trends. Resistance points combine to form |
| Trading ranges lend themselves to both long positions | | | | supply line for down trends. In trading ranges, the |
| and short positions depending upon the position of | | | | support points combine to form support levels and |
| the price in the trend. Trends come in a wide range | | | | the resistance points combine to form resistance |
| of sizes. Trends can emerge and run their course | | | | levels. Trend channels develop when parallel lines are |
| within the period of one trading session, or they can | | | | constructed through the appropriate points. The |
| last for years. A market or an individual issue will be in | | | | parallel line to a demand line in an up trend is the over |
| more than one trend at any one time. | | | | bought line. The parallel line to a supply line in a down |
| For trading purposes, Wyckoff identifies four trends | | | | trend is the over sold line. In trading ranges, the |
| that matter most. There is the immediate trend, the | | | | parallel line to a support level is a resistance level and |
| short term trend, the intermediate trend and the long | | | | the parallel line to a resistance level is a support level. |
| term trend. When these four trends are all pointed in | | | | Not every position in an up trend is suitable for |
| the same direction, the price is likely to experience its | | | | establishing a long position. It is also true that not |
| most dynamic movement. However, profitable trading | | | | every position in a down trend is suitable for |
| can consistently be realized even if all four trends are | | | | establishing a short position. Trading ranges may be |
| not pointed in the same direction. | | | | used to establish either long positions or short |
| The key to success is to have the trend that is | | | | positions. Here again, the position in the trend channel |
| being traded clearly and correctly defined and to | | | | determines whether long or short positions are |
| know at all times where the price is in that trend. | | | | appropriate. There is one position in all trend channels |
| Knowing how the other trends are defined and what | | | | that is generally considered inappropriate for |
| the position of the price is in those trends can be | | | | establishing positions. |
| helpful because the position of the price in a trend | | | | |