every day trader knows that the main push of whatever market movement is happening is due to banks and financial institutions and big money the retail trader cannot affect the market as the big banks can a lot of you guys have been requesting this video so i'm going to try to do a extremely short video explaining how banks trade and the entire wyckoff method [Music] welcome back to the channel everybody my name's artie and this is the moving average a show where we discuss everything day trading to keep you profitable on a consistent basis okay now if you are not a intermediate or advanced trader please just click away from this video this is extremely advanced stuff and you need to learn the basics before you get into this that's why i've been waiting for over 100 videos to make this it's it's not the easiest thing the wyckoff principal or wyckoff method um actually let's just get into the charts and i'm going to show you what i'm talking about so there are four main parts of the y-cof method the first part is the law of supply and demand when demand is greater than the supply the price will rise then when the supply is greater than the demand the price will fall and one of the tools that you can use to identify this is volume bars so for example in an area like this you can see that the price was going flat yet volume is massive same thing right here price is flat yet volume is spiking i will get into that a little bit later the second part to the wyckoff method is the law of cause and effect the two examples put forth in the wyckoff method is a period of accumulation moves into an uptrend the cause and the effect and a period of distribution moves into a downtrend cause and effect so for example this would be a period of accumulation causing the uptrend and this would be a period of distribution which will probably end up in a downtrend as it did here as well as here now the third part is the law of effort and result this is where we're going to look at the volume bars in conjunction with price action so the first example that i showed you right here was this period of accumulation accumulation is basically consolidation on the bottom end so we had this big move down a slow moving period of accumulation this consolidation phase and yet you could see in this area when the price was dropping the volume was relatively growing and you know getting there now in this period where the price action is flat you see this massive amount of volume that's the effort and result that this theory is pointing to that in these zones there's massive amounts of volume so this is basically like a divergence price is flat yet volume is high versus when it's in confluence with each other you know you get that nice smooth movement down or up these are the areas you need to look out for i get asked all the time how do you know if price is consolidating it's because it's flat and volume is massively high that's how you know the fourth part of the wyckoff method is known as the composite man um basically this is wyckoff's way of saying that the market is pushed by an evil entity the man the banks the manipulators and this allows you to think of the market manipulator as a bad guy and you know how he moves the market to screw over the retail trader and how you can actually get on board with him so you guys probably want to know how to trade this there are four stages to the whole wyckoff thing and there's multiple i'm going to get into like a more in-depth video if you want to see that if you actually do want to see that let me know in the comment section down below but i'm going to try to make this video super short because every y cough video is like an hour and a half long okay if we fine tune this area of consolidation you can see that once price started going flat volume started to rise and then we got this spike out of this range and then it broke out this spike out of the range is the trap that literally like the people that got stuck here really really got screwed and this is what the composite man does he traps traitors right here this is the false breakout that i was talking about in previous videos this is known as the spring in the wyckoff method and it's usually in an area of consolidation which is on the bottom end known as a period of accumulation with high volume spikes and then it breaks out of that range and that's when you can go in for a long position so when the price is accumulating after a long downtrend this is why you want to enter your trade at the top of this range and not worry about these breakouts keep the breakouts in your mind and think of them as springs these are the massive traps so look for the breakout of these ranges with massive volume and then you should start looking for a long position once it breaks out of that range after the accumulation phase which is the first phase of the wyckoff method the next one is the mark up which is right here it breaks out of that range moves up that's the markup the next phase is distribution it's another phase of consolidation but this is on the high end and while distribution is going you should be looking for your positions to go short so again you get this area of consolidation with high spikes in volume and then you get the spring out another high spike in volume followed by a drop in the price in the market this is known as the mark down now this is an extremely basic way to look at it the whole wyckoff theory is extremely deep and it can be broken down like way way way more than what i'm doing right here but i just want to give you a general sense of price action supply and demand and the white cough theory just to recap we have a period of accumulation with high volume spikes followed by the mark up the uptrend once that uptrend is exhausted we fall into a period of distribution another consolidation range with high volume spikes and you need to keep an eye out for the springs the breaks out of those ranges those are the signals that once those happen then you start looking for your entry to go short after a period of distribution and to go long after a period of accumulation now also just to clarify what the composite man does the market manipulator he right here is buying up a few positions not to really you know make the market go crazy but just to like build up his his long position so he buys and buys and buys every time he's at the bottom of this range right here and then the last push down is caused by the composite man and then they start really taking off same thing goes on the opposite end there's a cell there's a cell and then there's a big push off cell while the retail trader is buying up he is slowly selling off and then causing the mark down phase now again if you guys want another in-depth video explaining the entire like breakdown of the accumulation phase and the entire like series of events that happens in each one of these phases to get the laser entries let me know in the comment section down below it goes you know phase a phase b all the way to phase e breaking the support and resistance lines like this is really really in-depth advanced stuff so i just wanted to give you a breakdown of the wyckoff theory and the why cough method and how it works and how supply and demand works so if you guys enjoyed this video i'd really appreciate a big fat thumbs up really helps out with the youtube algorithm helps promote my videos more and it helps the channel grow so it's your thank you to me for giving you this information for free and if you guys have been in this situation where you've been caught in the spring and uh you know you've made those mistakes check out this video that i did on the top 10 mistakes that most retail day traders make and if you guys want to see more videos like this make sure you're subscribed to the channel by clicking this button right here thanks so much for watching and we'll see you in the next video