Was watching a bear flag form on ES on Friday night, expecting a sharp move lower, but it broke out to the upside. Very confusing price action, however Wyckoff analysis shows what was happening near the open.
The essence of Wyckoff is that price action must always be compared against the volumes.
eg.
-- Large volume on a small downwards move is potentially bullish, because the buyers are pushing hard to prevent it going lower.
-- Low volume on a large-ish upwards move may be inconsequential, but if repeated, is bullish. When such "ease of movement" happens, it means the bears are pulling their offers (ie. they're expecting a potential move higher).
Look at the volume numbers on each swing, and compare it to the price excursion. This was too tricky for me to interpret accurately in real time. It's easy after the fact. Aim is to see these patterns as soon as they occur so a trade can be placed.
Aim is to see these patterns as soon as they occur so a trade can be placed.
