Intraday price volume analysis | Wyckoff method

Using Price and Volume Analysis to Identify Stock Accumulation and Distribution Cycles

Price and volume are the two most vital data sets for analyzing supply and demand dynamics according to Wyckoff theory. Monitoring their interaction provides clues on emerging institutional accumulation and distribution cycles underpinning major trends.

Why Price and Volume Matter

Richard Wyckoff placed great emphasis on volume analysis believing that price tells WHAT while volume tells WHY and HOW.

Observing the combined signals enables assessing the market's true convictions better than price movements alone.

Key Relationships

  • Increasing prices on rising volumes imply authentic demand and mark accumulation underway
  • Rising prices on declining volumes suggest lack of commitment signaling potential distribution

Following are methods to utilize volume for identifying cycle stages.

Tracking Accumulation

In the Wyckoff methodology, accumulation unfolds as larger investors discreetly acquire positions over an extended period WITH MINIMAL PRICE DISTURBANCE.

This stage is confirmed by charts showing:

  • Narrow trading range - Price consolidates within defined levels
  • High volumes on dips - Demand emerges on reactions
  • Low volumes on rallies - Weakness lacking conviction

This demonstrates informed capital flowing in WHILE TRADING INTEREST REMAINS LOW allowing stealthy entry.

Detecting Distribution

When supply eventually exceeds demand, the stock enters the distribution phaseWHERE INFORMED MONEY BEGINS UNLOADING POSITIONS methodically INTO STRENGTHensuing rally attempts encounter resistance.

Distribution is visible when:

  • Expanding price spread - Volatility picks up
  • High volumes on rallies - Supply surfaces on upmoves
  • Low volumes on reactions - Hesitant dip-buying

This shows emerging selling pressure CHALLENGING DEMAND.


Volume adds crucial context. Analyzing volume surges, especially when prices reach swing points permits recognizing shifting supply/demand forces propelling accumulation/distribution cycles.

Incorporating volume into analysis validates the price action Legato timing significant movements.

Check this video to know more in detail. Video is in Malayalam language taken from our youtube channel "Share Market Malayalam by Muhammad Riyas"





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