Richard Wyckoff

In this post, I introduce Richard Wyckoff. Here’s how Wikipedia describes him (

“Richard Demille Wyckoff (born November 2, 1873; died March 19, 1934) was a stock market authority, founder and onetime editor of the Magazine of Wall Street (founding it in 1907), and editor of Stock Market Technique……..”

But the write-up does little justice to a man who established a school of thought. Richard Wyckoff believed that understanding the context and principles of market movement was the path to success. His approach struck a responsive chord within me, fanning a spark that had been lit by Market Profile Theory. It’s strange how things work out – I came across Steidlmayer in 1980 and only later to Wyckoff’s (whose hey day was in the 1920’s). Yet the two works fit together like a seemless whole.

Many modern traders are unaware that Wyckoff”s approach was diametrically opposite to Richard Schabacker’s, the uncle of Robert Edwards (Edwards and Magee fame). Schabacker believed in the classification of patterns – the ‘why’ was less important than the ‘form’. I see Schabacker’s approach mirrored in many modern works. (For a write-up on Schabacker, see

Wyckoff opened my eyes to the relationship of:

  • Direction – which way is the market seeking to go?
  • Volume and range – how good a job is the market doing in moving in its desired direction.

Steidlmayer was later to call these factors ‘trade facilitation’.

Wyckoff’s idea behind ‘trade facilitation’ was simple: the effect (range) ought to mirror the cause (volume). If it failed to do this, the market was telling us that a new game was afoot. So, if we had above normal volume and below normal range, this was a warning of a possible change of direction.

While Wyckoff’s principles are easy enough to state, applying them (at least till now) was another matter. There were at least two troublesome questions:

  1. How do we determine the market’s attempted direction?
  2. How do we determine whether volume is net selling or buying for any given period?


The answer to (1) is to relationship between the close of today and that of yesterday: e.g. a plus close was interpreted as an attempt by the market to move higher. But what happens when you have a day with higher highs and higher lows and a down close? I always found it diffcult in these circumstances to say that the market was looking to head South.

The answer to (2) was to treat a whole period’s volume (e.g. the day’s volume, the 30 mins volume etc) by referencing (1). If we had a down close, we’d treat the whole period’s volume as selling volume. You don’t need me to point out the logical flaws to this.

Once we had intra-day volume another problem arose. The issue is well-illustrated by the volume during an ES trading session. The greatest volume tends to take place in the first two hours. The volume then tapers off till the last two hours of trading when volume again increases – usually the volume for these last two hours is less than the first two hours. Figure 1 shows what I mean. The yellow rectangle shows one day’s trading. So, given this tendency, merely comparing one period’s volume with the previous one, was inadequate – we aren’t comparing apples with apples.


FIGURE 1 ES 30 Mins Bars

Those were the problems. Tomorrow I’ll present the solutions.

12 thoughts on “Richard Wyckoff”

  1. Ray,

    Looking forward to your next post.

    I have always had problems correlating volume with anything meaningful. Even Market Delta is not as helpful as one might expect.

    I have also found that there are as many theories about volume and market direction as there are traders.

    Thanks for sharing your market knowledge.


  2. Hi JM

    Yes the Day Traders Bible is a great book. It’s an early piece and in it Wyckoff makes some criticism of technical analysis.

    After reading all of his printed works, I think he was referring to the Schabacker variety because later in his career, he certainly turned to TA.

  3. Hi Charles

    I agree like most theories, there are as many theories and variants of theories as there are traders. I hope my blog tonight provides some food for thought.

  4. Good evening, I have an original copy of Magazine WallStreet published by: Cecilia G. Wyckoff. The mag is Vol. 41, No 12 and the title is: What Made Radio Go up?

    There’s also a segment on Full Employment: Prosperity’s Problem and Its Solution By Irving Fisher.

    Date: April 7th 1928

    Do you have any idea of value of this magazine? It’s in mint condition. Thank you in advance for your feedback!


  5. Hello,

    Nice post. Actually I am a Wyckoff trader. I would add the importance of support levels being penetrated with increase in volume and prices going back inside the trading range, showing that the pressure of the buyers are overcoming the sellers below the support. High effort, small range in prices and no new-lows, little reward to the bears, go long buddy. Wyckoff works better than indicators (they always agree if you find the right spot).

    Best Regards


  6. I stumbled on the site which has a trading system of analyzing waves within waves using boxes and zigzags, looks pretty interesting. Also lets you compute time, length, delta volume. I was thinking of giving it a shot. Looks like a better deal than Weis Wave. Any thoughts?

  7. Hi JDouglas

    Thanks for the comment.

    I am not familiar with mboxwave. So, I went to the site. I does look to be performing the same functions as the Weis Wave. If so, then it is better value.

    But, since I have no experience with mboxwave, I’ll refrain from giving further comment. The key will be how mboxwave determines the swing volume.

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