I came up with the commitment thing, after watching the markets for a long while.
I originally felt that when there was substantial buying (accumulation) in a stock, that it was pretty much guaranteed to breakout at some point and begin a mark-up phase, and the accumulators would not sell until it was distribution time, for a tidy profit - basically I expected stocks would follow the 'text book' Wyckoff Schematic that everyone is taught when they begin.
So this is what I learned....
Firstly, this sort of commitment thing only really takes place with active professional traders and professional speculators, this is not 'a thing' with passive professional investors (I don't think).
So, after watching stocks over many years, I regularly saw what appeared like large 'obvious' accumulations taking place, that suddenly failed.
It didn't happen a lot, but it happened often enough to cause concern, and have me questioning what was happening.
And I am someone who needs to develop an understandable narrative or story, so I can better comprehend what is going on.
So there would be a sideways trading range (accumulation zone), then instead of the expected breakout bar, there was suddenly a breakDOWN bar on pretty high volume.
I was initially confused with this result, and thought the sideways range may have been a re-distribution zone, and I was mistaken about the accumulation.
However after reviewing a few stock where this happened, I was pretty certain that what I was seeing was really truly 'buying'.
And what appears to happen is an unexpected 180 degree change in sentiment by the accumulators - for whatever reason - and the accumulated stock is just dumped, quickly and easily, with no emotion.
(and a couple of these stocks had some sort of potentially bad news announcement pretty soon after)
So I have learned, that when I feel that active professional traders and/or professional speculators are involved in an accumulation, I am well aware that during the accumulation phase, the commitment to their positions is variable until the accumulation phase is finished (and remember these buyers have a good reason for buying - and it isn't for a long term hold to eventually receive dividends - it is for a future positive news flow that they can 'sell' to the market while they perform a mark-up phase and then a distribution phase).
They will dump the lot, if what they expect doesn't eventuate, and they can't 'sell' the story to the market.
Then once the breakout takes place and the mark-up phase begins, there is a stronger commitment to their positions, and it keeps getting stronger the higher price goes. They certainly won't dump their positions so easily once the mark-up begins (and if they need to get out early for some reason, they will at least try to quickly spike price up and sell, rather than just dump).
So the higher price goes, the more committed to their position they become, and they will defend price against supply when it comes in (up to a point), and give price a regular push when supply is low, to keep the broader market 'interested'.
Finally, when I think about the commitment thing, it fits well with how Wyckoff himself traded stocks.
He didn't buy the accumulation phase almost ever, because he didn't know how long it would be until the breakout would take place and the mark-up would begin. He said these early phases held considerable risk.
So he would almost always trade after a breakout and during the mark-up phase of stocks with strength (obvious buying) in the background - like an accumulation (or the mirror image opposite - he would sell after a breakdown, with supply in the background, as he didn't mind going short either).
He felt this type of trading offered the least risk, and the greatest chance of success - and he slowly built a small fortune over time.
