I had been reading the book of Anna Coulling, "A complete Guide to Volume Price Analysis" and I was struck of the basic simple principles that all time great traders had followed making them so successful in the Stock Market.
Richard Wyckoff is one of the great trader and teacher who had been the contemporary of Charles Dow. As Charles was the founding father of Technical Analysis, Richard was the the founding father of Volume and Price Analysis.
Why Volume and Price Analysis? Because he believed the basic laws of Supplky and Demand just like Charles Dow and Jesse Livermore whom Wyckoff had interviewed many times during his publishing years when he tried to ensure that self directed investors be given insights of how market actually worked.
Wyckoff presented 3 Basic Laws he deducted from his years of experience. At and early age of 15 in 1888 he had been exposed to the Market as a stock runner, almost same time as Charles Dow was launching of the first edition of his Wall Street Journal. It was during these early years that it seemed to be that the "ticker tape", (the chart we have now a days) inspired him to understand clearly the direction of the market. 10 years later his in-depth insights with the Market through the ticker-tape made him enough money at age 25 to open his own brokerage office. He dedicated his understanding of the market to give it back to the smaller investors by being an educator and source of unbiased information.
Here are the 3 Laws he concocted for small time investors which had been the same tenets made as blueprint by all Wall Street Investment banks.
Richard Wyckoff is one of the great trader and teacher who had been the contemporary of Charles Dow. As Charles was the founding father of Technical Analysis, Richard was the the founding father of Volume and Price Analysis.
Why Volume and Price Analysis? Because he believed the basic laws of Supplky and Demand just like Charles Dow and Jesse Livermore whom Wyckoff had interviewed many times during his publishing years when he tried to ensure that self directed investors be given insights of how market actually worked.
Wyckoff presented 3 Basic Laws he deducted from his years of experience. At and early age of 15 in 1888 he had been exposed to the Market as a stock runner, almost same time as Charles Dow was launching of the first edition of his Wall Street Journal. It was during these early years that it seemed to be that the "ticker tape", (the chart we have now a days) inspired him to understand clearly the direction of the market. 10 years later his in-depth insights with the Market through the ticker-tape made him enough money at age 25 to open his own brokerage office. He dedicated his understanding of the market to give it back to the smaller investors by being an educator and source of unbiased information.
Here are the 3 Laws he concocted for small time investors which had been the same tenets made as blueprint by all Wall Street Investment banks.
- Law of Supply and Demand.
When demand is greater than Supply, then prices will always rise.
When supply is greater than Demand, then prices will always fall, absorbing oversupply in return.
Prime Example: On Winter Sale, prices are low and buyers come in to take on the supplies. - Law of Cause and Effect.
A small amount of volume activity will only result in a small amount of price action. - Law of Effort and Result
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