In a pleasant English sunny spring weather in south of England, Tom Williams, Gavin Holmes and myself spend a beautiful afternoon with English tea in the countryside talking about everything from trading to stock & commodities to way of living our lives as a trader, and not forgetting volume spread analysis.

Tom Williams regarded himself as an educator & was very generous and candid to share about the original idea about price and volume that he learned from Richard wyckoff and finally created his trading analysis called volume spread analysis or vsa. His unique trading, called vsa principles were developed after more than 15 years of mentorship and observing how insiders work (FYI, Tom Williams was working for a syndicate trader then).

During the interview, Tom Williams pulled no punches and talked everything, about meeting his prodigy, Gavin Holmes whom later, they formed an educational company that based on VSA principles – TraderGuider International based in US Chicago. Incidently, Tom Williams is over 80 years and still an active trader, trading from his humble home whenever he sees trading opportunities.

Tom Williams is also the current chairman of this great educational company, tradeguider.com and contributed his ideas and teaching to his vsa students in www.vsaclub.com

Tom’s motto is to tell the world about market manipulation by powerful and hidden forces that an average person cannot comprehend. Tom’s message is simple. spread the teaching of vsa to all corners of the world. He is a firm believer that Individual should not keep genuine wisdom that can benefit others. He quoted “I intend to spread the words till my final days….Trading makes me truly alive and I will continue to write and contribute to those traders who wish to elevate themselves professionally”.

Anyone who is with Tom Williams in person, would be moved by his conviction and motivation at the current stage of his life. Most people I know at his stage will be tending to their personal affairs rather than sitting in front of a computer teaching thousand of student including myself about markets and trading.

My trip to UK and the time spend with Tom Williams and Gavin Holmes has been well spent and invested to benefit others such as our supporters, subscribers or people who regularly visit my website.

Thank you again.

- Martin -

P/s: I believe I’m better trader/investor now, if not a better person after the interview. I wud pose content of the interview in the coming weeks. So, stay posted.

Here are some of 37 benefits that you get from Tom’s book:

1. find out how to pick the right stocks while leaving the dross alone
2. understand why losses are almost meaningless to a good trader
3. see why strength always appear on down bars and weakness always appears on up bars
4. why, and how, the specialists try to trick you into buying into a weak Market and selling a strong Market
5. recognize and profit from a shakeout in the Market or stock you are trading
6. how to tell when a Market is ready to change from a Bull phase to a Bear phase (and vice versa)
7. what happens to the price spread when the specialists feel bullish
8. what to watch out for when the specialists feel Bearish
9. why does a Market change trend and how you must position yourself to be ahead of the game
10. how do the specialists “test” when the Market is ready for a Bull run and why you should be alert to this
11. how to spot when a Market is at, or near its top
12. why a point and figure chart can predict how far a Market will go
13. why you simply must set rules, and stick to them
14. what one thing do all beginner traders have in common that turns them into successful traders
15. expect to lose money if you do not do this one simple task
16. what the professional traders will try to do once you have entered a trade. Don’t let this happen to you
17. why media news is all hog-wash
18. why most indicators are a load of bull and why you should ignore them
19. why “it’s different this time” is a shedload of garbage
20. how to get out of a Market that is against you
21. how to get into a Market that will run for you
22. why there’s no such thing as a “trading system” and why you should turn your back on them
23. uncover the best ways to identify turning points in your chosen Market
24. why it’s easy to be a trade-o-holic but you shouldn’t be one
25. what following trend lines and the parent index can do for your bottom line
26. what to do when a Market reaches an old top
27. how to see a bottom reversal and take advantage of it before the herd
28. what to do once weakness has appeared in your Market
29. identify what is a strong bar and profit from it
30. what is “stopping volume” and how you can make gobs of cash from it
31. see how a Market can go up (and down) on little or no volume
32. how you can tell if a Market goes weak in a Bull move
33. notice the difference between a strong and a weak Market and you will hit the jackpot
34. how to take advantage of special situations & to find out how the specialists use these for their own gain and you should too.
35. don’t even think about trading until you consume Chapter Five
36. shows you how you can find an easy way to pick stocks for your protfolio
37. why really bad news can be an opportunity you can put your shirt on

Click here to get your copy !

I’ve been taught a method called VSA or volume spread analysis which I’ve learned from Gavin Holmes and the Great Tom Williams, a former syndicate trader, who resides in UK. According to Tom, he learned it from another syndicate traders during his days as a male nurse.

Tom Williams had three principles as follow:

1. Following and understanding volume which shows the true activity of professionals, which matter the most because professionals move the market not retail traders.

2. Following the spread, which is the high/low of each occurring bar, this alerts a trader to the bullishness or bearishness of a particular price movement.

3. Following closing price, or price action which tells you how the price reacts to the volume and spread.

He believe that using these techniques, you can successfully trade on the right side of the market, with the professionals. Once you learn to understand these principles you will see that your decisions to enter a trade are rationalized by what your actually seeing and not a phony indicator.

Tom Williams enhanced the studies from Richard Wyckoff, another great trader in 1920s to create a conventional software program which can be used to trade, called Tradeguider.

However, I don’t suggest spending your money on this because you can take these principles you’ve learned and trade successfully without coming out your pockets.

Buying a software  is not always the right solution. Understanding the reasons the market reacts in a particular way is crucial.

To better understand VSA, you can access the volume and your accelerator pedal to a car and your spread is the actual motion, the chart represents the hill your car must climb. You may have extremely high volume however your spread is low, which basically means that gas was stepped on a lot but the actual movement of your car didn’t move far.

Good luck !

One of the questions I received was, “Will your price & volume analysis technique work on our (Malaysian) markets?” The answer is a resounding yes and is obvious if you understand what trading with volume spread analysis  is all about.

Volume spread analysis (VSA) is better word for price and volume analysis and coined by Tom Williams, inventor of VSA and chairman of TradeGuider. See press release of TradeGuider.

Most people incorrectly assume that trading or investing is all about understanding the fundamentals of the market or knowing the balance sheet of a company. It doesn’t have as much to do with that as it does with understanding people.

People’s perceptions or expectations of a company, or even the entire economy, are what drive prices of securities. Prices of equities, commodities, and currencies are all subject to the same laws of supply and demand as is any other product. In fact, this is why you will often see prices drop after a company meets expectations for an announcement.

Insiders buying or professional buying and selling makes up 80-90% of the trading volume. So when they are not present in the market, why should you. Professionals or smart money has more resources and $$$ to access company information prior being released to the public.

Doesn’t it make sense to follow the smart money ? See the below YouTube Video of Gavin Holmes, TG CEO

The demand for the shares prior to the release overwhelmed the supply. Insider sellers realized this and raised their prices they were asking for shares. Retail Buyers, in a desperate attempt to own shares, will raise the amount they are willing to pay for them. Smart money buy on wholesale and sell it at retail prices to the average Joe Investor.
For instance, if a company know that they wud release a very good news e.g. higher earnings for the quarter  than expected, but traders have already anticipated this, then the price will not move up as you might expect. The smart money who were expecting positive sales results have already bought their shares prior to the announcement. This should have caused a rise in price for the reasons I stated above.

Once the data is known by everyone and there is no surprise, some buying may come in. However, the insiders who already own shares are disappointed that the price isn’t rising more, or they are satisfied with their profits and begin to sell slowly – distributing at the top of the market – area of distribution according to R. Wyckoff of which Tom Williams refined Wyckoff Trading method for today’s market environment .

Without increased selling pressure from smart money, these sellers must buy their price in smaller quantity to attract more retail buyers to take their shares.

So, you see how human emotion, basically fear and greed, will motivate retailers,traders or investor to act in the market. This is what causes price spread dominated by trading volume. Price charts with volume never tell lies. Human does !

So to be successful in trading, you need to know how to read this emotion and the strength of it. That is what volume spread analysis or price and volume does. The charts show us the actions of the traders who are involved in that security. In looking at candlesticks , we can read the strength of the emotion of those who will move the markets. For more information on how to learn about price and volume analysis (click here.). Watch out for the Price and Volume workshop in Dec 2010.

We can see when this emotion is shifting and leading market turns.
Take, for instance, at the bottom of the market, retailers wud be selling as the market break lowers as they cannot afford to see their investment turn into dust. The end of the bottom is often called selling Climax  -a situation characterized by the highest intensity of heavy selling occurring within a downtrend.

This situation occurs only after a downtrend has been in effect for some time like what we had in late 2008 – Mar 2009.

This condition marks the end or the approaching end of a particular downtrend. This panic selling creates an extreme expansion of the price spread and an expansion of the volume, this action may occur over one day or over several days. If it does NOT HAVE THIS IT IS NOT A SELLING CLIMAX.

So by viewing price spread and daily volume’s actions in a candlestick chart, we can make assumptions about the strength of the movement of the stock price. These observations are part of our decision-making process to time proper entries and exits in the market. That is what volume & spread analysis (VSA) can offer you as a trader or investor.

Have a great day.

For more information, you can get my two best selling book – Dividends Dont Lie or SuperCharge from our online store or any major bookstore. We wud personal autograph the book if purchased from our online store.

Click here for online store.

It is dangerous in that time spent waiting for an issue to begin movingin the intended direction is time during which the character of the action can change making the desired move less likely or not likely at all.Determining an issues readiness to move involves two considerations. The first consideration is the position of the price in its trend.

The second consideration is the character of the price and volume action that has brought the price to its current position. Wyckoff teaches that there are a relatively small number of what have come to be called primary trading positions. These are places in the unfolding stream of the action where a worthwhile move in one direction or the other has a high probability of beginning. There is a set of primary trading positions that favor the start of moves to In step four of the Wyckoff Method, Wyckoff tells us to determine a stocks readiness to move. Taking a position in an issue that has not or has not nearly completed it preparation for its next move is wasteful and dangerous. It is wasteful in that funds committed to a position that is not making progress in the intended direction could be better used in a position that begins to move in the desired direction quickly.

the up side and another set that favor the start of down moves. Those that favor advances are the spring position, the test of the spring, the back up to the edge of a creek and the normal correction of a previous advance. Those that favor declines are the up thrust position, the test of the up thrust, the rally back to an ice level and the normal correction of a previous decline. In each case, the primary trading position represents a last point of support following a sign of strength if an up move is anticipated, or a last point of supply following a sign of weakness if a down move is anticipated.

Each primary trading position is worthy of a detailed presentation. In future installments in this series each primary trading opportunity will be discussed in greater detail. For now, only a brief introduction of each position will be given.

See Youtube video below by Jim Cramer CNBC Host of Mad Money on how he trades the US Market using VSA.

Wyckoff identifies a potential spring position as a price penetration of a previously defined support level. For a potential spring position to be worthy of consideration of an entry point on the long side, the price spreads should narrow on a day to day basis as the price approaches and penetrates the support level. Generally, this type of price action in combination with declining volumes results in the highest quality springs. If the price responds to a spring position as it should with a rally. the response will in the overwhelming number of cases be followed by a test of the spring. The purpose of the test of the spring is to confirm the bullish indication provided by the spring. This is accomplished by a narrowing of the price spreads as the price approaches the low point of the spring. As was the case with the spring itself, a higher quality test generally results if the test of the spring unfolds on declining volumes. It is also desirable for the low point of the test of the spring to be higher than the low point of the spring and for the average volume during the testing phase to be lower than the average volume as the price approached the spring position.

The jump across the creek is defined by Wyckoff as an advance that takes the price through a zone of resistance defined by the tops of earlier rallies. The characteristics of a jump are wide spreads to the up side with strong closes and high volumes. The jump across the creek is not a primary trading opportunity. However, following the jump across the creek there will likely be a back up to the creek that can provide a primary trading opportunity. This is the phase in the action when the price reacts back toward the zone of resistance that was overcome on the jump.

The purpose of the back up is to confirm that the former zone of resistance has been converted to a zone of support. The confirmation is provided by a combination of narrowing price spreads and declining volumes as the price approaches the former resistance. The up trend that is defined as the price of an issue leaves a trading range to the up side will normally consist of a series of thrusts. Following the completion of each thrust, there will be a corrective reaction. A normal correction will result if the price returns to the vicinity of the halfway point of the previous advance. A primary trading opportunity exists if the price approaches the halfway point on narrowing spreads and declining volumes.

The first primary trading position that is likely to develop on the short side is identified by Wyckoff as being the up thrust. The price of an issue enters an up thrust position when it penetrates a previously defined resistance level. A high quality up thrust is one from which the price begins a prompt decline. A high quality up thrust is one that develops on narrowing price spreads as the price approaches and penetrates the resistance level. Generally, a high quality up thrust will also unfold on declining volumes. After the price has responded to the upthrust with a decline, there will almost always be a test of the up thrust. The test is another primary trading position for the short side. The characteristics of a high quality test of an up thrust are narrowing price spreads to the up side on decreasing volumes. It is also desirable for the test to not put in a higher high than the up thrust and for the average volume as the price makes the test to be lower than was the case on the up thrust it self.

When the price of an issue leaves a trading range to the down side, there will frequently be what Wyckoff refers to as a fall through the ice. Ice is identified as the zone of support defined the bottoms of previous reactions in the action. The fall through the ice occurs when the price trades through this zone on widening spread and increasing volumes. The fall trough the ice is not a primary trading opportunity. However, the rally that follows the fall through the ice can develop into a primary trading position. This advance is identified as the rally back to the ice. The purpose of the rally back is to confirm that the former support provided by the ice has been converted to resistance. When this confirmation is in place, the price can resume down side progress. The rally back that is likely to provide the best entry point on the short side if it unfolds on narrowing price spreads to the up side and declining volumes as the price approaches the zone of former support. Down trends that develop as the price leaves a trading range consist of a series of thrusts and corrections. The correction of each thrust can provide a primary trading position if it is completed in the vicinity of the halfway point of the previous thrust to the down side and if it unfolds on declining volumes.

Primary trading positions in individual issues should not be considered to be automatic buy or sell points. Although most will provide an opportunity to take a profit, there are some that are likely to be more profitable than others. One consideration that goes into determining which primary trading positions are better than others is the indication provided by the figure chart of the issue. Those that indicate the largest potential are likely to provide the biggest profits. Another consideration that is involved in judging which primary trading positions should be acted upon and which should not is covered in the fifth and final step of the Wyckoff method.

Wyckoff teaches us to always trade stocks that are in harmony with the market. The trend of the market as indicated by the Wyckoff Wave indicates the line of least resistance. It reflects the direction in which most of the individual issues are moving. Traders who take positions that are in harmony with the line of least resistance are more likely to experience positive results than are traders who try to fight the trend. It is always better to have the market working for you than against you. There are always individual issues that make huge moves against the trend, but these are relatively rare.

The odds of finding one of these counter trend wonders are much smaller than are the odds of selecting an issue that is going to perform as well or better than the trend of the market.

Trading in harmony with the market means taking long positions when the market as measured by the Wyckoff Wave is in a defined up trend channel.

It means taking short positions when the market is in a defined down trend channel. When the defined trend is neutral or a trading range, trading in harmony with the market can mean standing aside and let the bulls and bears battle for control of the action, or consider opportunities on both sides of the market.

However, Wyckoff discourages being in positions on both sides of the market at the same time. Theoretically, trading both sides at once while the market is in a trading range is possible, but it is emotionally difficult. Whenever emotions enter the picture, the odds of making costly mistakes increases.

To avoid these errors make a commitment to never be long and short at the same time.

Just because the trend of the market and that of an individual issue are pointed in the same direction does not mean that the trader automatically has a green light to take a long position if the trends are pointed upward or a short position if the trends are pointed downward.

Remember what Wyckoff teaches in step one of the Wyckoff method. Knowing the position of the price in the trend is as important as knowing the direction of the trend. Situation where the market and an individual issue under consideration for a long position are both located near the top of their up trend channels should be avoided in favor of those where the positions are near the bottom of the trend channels. When short positions are being considered in down trends, it is best to locate those situations where both the market and the individual issue are positioned near the top of their down trend channels. If trading ranges are going to be traded, look for those instances where both the general market and the individual issue are positioned near the very top or the very bottom of their trading ranges.

An important concept in applying step two of the Wyckoff method is relative strength and/or weakness. Although most individual issues will be in the same trend as the general market and many of them will even be in the same position in their trends as the market, not all of these are the best candidates for new positions. All up trends and down trends are the result of a series of trusts in the direction of the trend separated by corrections. Some individual issues that are in harmony with the market from the stand point of the direction in which their trends are pointed will make relatively larger thrusts and experience relatively smaller corrections than the market as a whole.

These are the issues that are most likely to have the best potential to produce a profitable trade. Relative strength or weakness can be measured as soon as the first thrust in a trend has been completed. This will likely be even before the trend channel has been clearly defined. Those issues that have made larger thrusts than the market are the ones that should be watched closely as the prices make their first correction. The issues that have made the largest thrusts relative to that made by the market and that then make the smallest corrections relative to the market are most likely to perform well on the next thrust in the direction of the trend. These are the stocks that deserve the most consideration for new positions. This technique can also be used later in the development of an advance or decline when there are additional thrusts and corrections to consider. Those issues that most consistently out perform the market are most likely to produce a profitable trade.

The concept of relative strength and weakness can be helpful in locating trade candidates when the market is in a defined trading range. If the market is in a trading range, most individual issues will also be in trading ranges. However, some will be in up trends and some will be in down trends. Those that are trending up or down are relatively stronger or weaker than the market. These are the issues to consider first when looking for new positions. However, consideration must always be given to the position of the market in its trading range and the individual issue in its up or down trend. If both positions do not favor the likelihood of a rally or reaction, opening a position in that individual issue is discouraged. After the stocks that are trending up or down, attention can be directed to those that like the market are also in trading ranges. Here again, the positions of both the market and the stock are important issues to consider before opening a position.

The merits of trading in harmony with the market may seem obvious. However, most traders are exposed to a stream of market noise from brokers, friends, relatives, co-workers and the media. This bombardment of frequently conflicting information and misinformation can cause a trader to get distracted from those things that are really important. Step two of the Wyckoff method is one of those really important things. It along with the other four steps of the method are the best foundation on which to build a successful market operation.

The original course was actually written in 1931. However, the Wyckoff principles are as valid today as they were during the time of the great stock market speculators like Harriman, Keane and Morgan. These great traders of a bygone era, have been replaced by the large hedge, mutual and pension funds, but the Wyckoff strategies and the resulting profits are as solid and profitable just as they were over 80 years ago.
The Wyckoff principles were expanded by Robert Evans in the 1950s and 1960s. Evans, who learned

the Wyckoff approach from the master himself, went on to share his knowledge by opening The
Stock Market Institute. His wonderful stories explained the Wyckoff strategies in easy to understand ways as he introduced “jumping the creek”, “falling through the ice” and many other delightful phrases all designed to make the course more interesting and understandable.
The Wyckoff Course is both a comprehensive tutorial on how to achieve consistent profits in the stock market, and a history lesson. Many of the charts in the course focus on classic studies that highlight time tested ideas and continue to be of value in today’s stock market.
The basic Wyckoff Course is a self contained course that allows you to proceed at your own pace. It is divided into five units and consists of the following materials:
The 12 “Wyckoff Basic Lectures Programe” are now available on 1 MP3 format cd. The disk will have the following information on it:
Basic Lectures 1 thru 12 in MP3 format
Basic Lectures 1 thru 12 in Microsoft Word format – Lawrence Berg
Practice Trading 1 thru 6 in Microsoft Word format – Lawrence Berg
Definitions – Alvin Nelson
Trading Point – Michael Ellis
Glossary – Bruce Hands
The first portion of the Wyckoff course is devoted to a study of the 25 printed basic lessons. In those lessons you will learn the important Wyckoff principles and market concepts to prepare you for the second phase of your Stock Market Institute course.
It is the Basic Lecture Series and will teach you recognize, understand, and interpret the elements of market campaigns (or cycles of market action), as promoted by stock market professionals.
These 12 basic two side audio lectures are an integral part of your Wyckoff course of programmed instruction. They are an excellent means to learn the “art of investing and/or speculating” through supplementing the written course with this audio-visual presentation of many market campaigns. These lectures will assist you in learning the Wyckoff principles into a full understanding of how the Law of Supply and Demand functions in the stock market.
These audio lectures are called “Basic Lectures” because their purpose is to present basic market principles and information.
Lecture #1 covers the philosophy, history, and basic concepts of the Wyckoff course.
Basic Lecture #2 covers the very important topic of “Trends.” It is illustrated with 10 charts. These charts enhance the learning through the use of these vivid graphic representations, and ensure more rapid comprehension by the learner.
Basic Lecture #3 with its 15 charts covers the very important subject of “Accumulation”, and so on through twelve interesting lectures, as you will note in the Table of Contents.
These lectures represent the combined years of experience of Wyckoff SMI’s technical and instructional staff. The script is well written and tightly organized to insure highest quality recordings. The situations selected and covered orally, on the lectures, and visually, on the charts, present classic and meaningful examples of market action.
Listen to each lecture time and time again at first, to get the general idea of the subject and to recognize the important principles and points on the charts, with a second and more thorough study to follow. At this time make notes of the important happenings, lightly and in pencil, on your charts. Add anything that will help you. Perhaps, on another go-round on a given lecture you might want to use various colored pencils to mark outstanding points.
Each lecture is followed by an exam. You may e-mail, fax or mail in for grading with model answers. By sending in the exams you will be able to make sure you are learning the basic concepts of the Wyckoff Method.
Then, from time to time, go back and review the concepts presented. This is experience building and will give you the knowledge and the confidence you need to become successful in the market.
The SMI Basic Lecture Program is a twelve lesson course in advanced applications of the Wyckoff method of stock market analysis. These lessons are designed to convert the purely theoretical knowledge in place to a practical understanding of real life market application. A Wyckoff student who has not taken advantage of the Basic Lecture Program knows what to do but he may not feel comfortable about his knowledge of how to do it. The twelve Basic Lectures are designed to help bolster the student’s ability in this critically important area.
Each lecture in the series covers a particular subject or a group of closely related topics that are used as a unit in actual market operation. There is some review in each discussion to reinforce prior learning, but the primary thrust of each lecture is the detailed study of examples. This helps expand the student’s ability to identify the principles at work in the market. Each lesson concludes with an exam to test comprehension. As with all SMI programs, consultation service is provided during the course.

Basic Lecture 1
Philosophy, History and Basic Concepts
This tape is primarily a review. In order for a study of advanced applications to be successful, it is necessary to begin with a clear understanding of the basics. The review in this tape reinforces prior discussions of the Wyckoff way of looking at the market and the basic laws that are the foundation of the Wyckoff method.
Basic Lecture 2
Trends
The Wyckoff method teaches that the most important thing to know about the market or a stock is its line of least resistance, which is the trend. Trends are subject to mechanical definition. However, real life market situations are not. This is where the art of market analysis comes into play. Basic Lecture 2 helps the student learn this art. It also helps develop his ability to trade trends.
Basic Lecture 3
Accumulation
In the stock market, it is generally true that everything that goes up eventually comes down and that everything that goes down eventually comes back up. For this to be of any value, the investor must know how to determine when. Accumulation is the preparation for an upward move. It is a process that unfolds gradually. Its development can be detected in time to take a long position. This lecture develops the student’s skills in detecting accumulation.
Basic Lecture 4
Climaxes and Secondary Tests
For most investors, it is much more difficult to exit a position than to enter one. Greed is usually the motivating factor here. This is why it is essential to have a thorough understanding of climaxes and secondary tests. They mark the termination of up and down moves. The examples covered in this lecture will expand the students ability at identifying these important actions so that he may be able to handle his positions in a more profitable manner.
Basic Lecture 5
Springs and Terminal Shakeouts
An area of accumulation must be tested many times before a stock can have a meaningful advance. The most important of these come as the price tries to move into new low ground. The ability to judge supply and demand at these critical points helps avoid costly mistakes and adds to profits. Developing this judgment can only come through a detailed study of numerous case histories like the ones outlined in this lecture.
Basic Lecture 6
Jump Across The Creek
The professional trader completes his accumulation just as the price of a stock is leaving the trading range on the upside and entering the early stages of the up trend. Here is where the ability to judge supply and demand is most important of all for an individual anticipating a long position. This is because the bulk of his position is taken in this area. A mistake here guarantees a loss. The examples in Basic Lecture 6 assist the student in developing the ability to properly appraise the demand / supply relationship at these critical points.
Basic Lecture 7
Upthrust After Distribution
Basic Lecture 7 focuses on the final stages of distribution, which is the preparation for a decline. Many investors avoid the short side of the market. For some reason they believe it is different and are afraid of it. The final stages are somewhat different and require extra study. However, there is no reason to be afraid of the short side of the market. The case studies presented in this lecture will develop judgment in an area that over the years can be extremely profitable.

Basic Lecture 8
Counts and The Count Guide
Figure chart counts are one of the biggest problem areas for Wyckoff students. What is required is an understanding of phases, accumulation counts, distribution counts, major base counts, intermediate counts, re-accumulation counts, redistribution counts and combining counts. There is a great deal here that all must be thoroughly understood if accurate counts are going to result. Anticipating too much or too little can be costly. This lecture helps develop the ability to know what to do and what to avoid.

Basic Lecture 9
Speculating – Taking a Position
All of the study of a market or stock situation is aimed at one thing – taking a position. The decision to take a position and actually taking it are two processes. The first one can be done properly and the result still be a loss because the second process is poorly handled. There isn’t a great deal of judgment involved here, but there is a lot to remember. This discussion reinforces all these points.

Basic Lecture 10
Wyckoff Wave and Optimism-Pessimism Index
Step five of the Wyckoff method instructs the investor to time trades with anticipated turns in the general market. One of the best ways to anticipate a turn is when there is a lack of harmony between the effort expressed and the result achieved. This can be best detected through a study of the Wyckoff Wave and O.P. Index. How to judge when there is a lack of harmony and what to do about it are explored in depth in this lecture.

Basic Lecture 11
Step by Step Analysis of Accumulation
Basic Lecture 12
Step by Step Analysis of Distribution
These two lectures are devoted to putting it all together, which is what every investor must do every time he sits down to study the market. These lectures outline how to do it during the most important phases of market action. Successful analysis of accumulation and distribution will turn ordinary profits into extraordinary profits. These lectures help develop the proper analytical skills.
The Wyckoff Basic Lecture cd retail at $30

should be anticipated. Wyckoff classifies trends by the direction in which they point and by the duration for which they endure. From the standpoint of direction, trends are either up, down or neutral also known as a trading range. Up trends are best suited for long positions. Down trends are best suited for short positions. Trading ranges lend themselves to both long positions and short positions depending upon the position of the price in the trend. Trends come in a wide range of sizes.

Trends can emerge and run their course within the period of one trading session, or they can last for years. A market or an individual issue will be in more than one trend at any one time. For trading purposes, Wyckoff identifies four trends that matter most. There is the immediate trend, the short term trend, the intermediate trend and the long term trend.

When these four trends are all pointed in the same direction, the price is likely to experience its most dynamic movement. However, profitable trading can consistently be realized even if all four trends are not pointed in the same direction. The key to success is to have the trend that is being traded clearly and correctly defined and to know at all times where the price is in that trend. Knowing how the other trends are defined and what the position of the price is in those trends can be helpful because the position of the price in a trend not being traded can have an influence on the action in the trend that is being traded.

However, positions should be opened, held and closed based solely on developments in the trend being traded. Wyckoff would frown on the idea of using the fact that the long term trend is up to justify taking a short term position on the long side, or any other combination of using the direction of one trend to justify a trade in a different trend. To be used effectively, trends must be defined correctly. Wyckoff tells us that trends are defined by two consecutive support points or resistance points of equal importance. An up trend traditionally is defined by two support points. Down trends are defined by two supply points. Trading ranges may be defined by support points or resistance points depending whether they develop after the completion of an advance or the completion of a decline. Support points combine to form demand line for up trends. Resistance points combine to form supply line for down trends. In trading ranges, the support points combine to form support levels and the resistance points combine to form resistance levels. Trend channels develop when parallel lines are constructed through the appropriate points. The parallel line to a demand line in an up trend is the over bought line. The parallel line to a supply line in a down trend is the over sold line. In trading ranges, the parallel line to a support level is a resistance level and the parallel line to a resistance level is a support level. Not every position in an up trend is suitable for establishing a long position. It is also true that not every position in a down trend is suitable for establishing a short position. Trading ranges may be used to establish either long positions or short positions. Here again, the position in the trend channel determines whether long or short positions are appropriate. There is one position in all trend channels that is generally considered inappropriate for establishing positions.

The Wyckoff Course instructs students how to identify what are called primary trading positions. These are those areas in the various trend channels where the taking of positions is most advised so as to best limit the possibility of a loss and to best enhance the likelihood of realizing the maximum profit possible. By limiting trading to these key areas, the Wyckoff trader can remain true to the duel goals of preserving capital and making a profit.