Stocks & Commodities V. 34:07 (28–31, 44): Richard Demille Wyckoff Part 4 by Stella Osoba, CMT

Richard Demille Wyckoff Part 4 by Stella Osoba, CMT

Whether you’re an investor or trader, you need to know how to intelligently evaluate price action. In this fourth of a five-part series about Richard D. Wyckoff, we look at how he evaluated price action using charts.

The core skill of a technical analyst is the ability to read charts to make intelligent trading decisions. As with any skill, the more you practice, the better you will get at it. For the lay person new to chart reading, the admonition bears repeating that chart reading is not the holy grail. It just increases your chances to better than even. Wyckoff said that he had stood at the ticker and observed as some of the great traders of his day, such as James R. Keene, John W. Gates, and Jesse L. Livermore, traded. The one thing they had in common was that they used their judgment. These men practiced constantly and continuously over a long series of years and were thus able to trade successfully more often than not. As Wyckoff said, all you need for success is to be a “little more expert in discernment than others.” So it is worth bearing in mind Wyckoff’s caution as you read what follows, and also bear in mind that there are no rigid rules to chart reading. Study Wyckoff’s method, but then make it your own...