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1986issue C091-6

Constructing Wyckoff trendlines on vertical and figure charts

Lock the demand-and-supply stride on the sensitive vertical record first, then restress only the more important lines on a figure chart so a later break is judged by how and where it occurs.

  • Place trendlines first on the vertical chart, where the angular pitch of demand and supply is most sensitive.
  • Transfer only the more important lines to the figure chart. If the two records contradict, follow the vertical-chart construction.
  • The four basic constructions are a support line, a supply line, an oversold-position line, and an overbought-position line.
  • A later break is read from how and where it occurs. Failure to reach a parallel is only a hint, judged with the rest of the chart.
Entries in this reading3 entries
Current trackWyckoff method33 readingsPoint and figure chart56 readingsTrendline139 readings

Start with the vertical stride

Demand-and-supply momentum is read from the angular pitch of vertical bars. A trendline is a straight construction through successive tops or bottoms that defines the current stride of that pitch.

A vertical chart is the time-based bar record used as the first and most sensitive surface for this work. The stride is the angular rate of advance or decline that the trendline is drawn to capture.

Draw the four basic lines

The four basic constructions begin with the two lines that hold the larger stride. A support line runs through two successive reaction lows and sketches how far a later normal reaction may travel while the larger upstride holds. A supply line runs through two successive rally tops and sketches how far a later rally may travel while the larger downstride holds.

The remaining pair marks extension. An oversold-position line is drawn parallel to the supply line through the first intervening reaction low and marks an extended downside position. An overbought-position line is drawn parallel to the support line through the first intervening rally top and marks an extended upside position.

Transfer only the durable lines

Trendlines are located first on vertical charts because those records are most sensitive. Only the more important lines are then transferred to figure charts.

A point-and-figure chart is a condensed, time-independent reversal record used to restress those more important trendlines after they have already been placed on the vertical record. If figure-chart trendlines contradict vertical-chart trendlines, the vertical-chart construction is the one to follow.

Classify a sideways band after the balance is read

Not every sideways band is treated as accumulation or distribution. Indiscriminate minor-swing lines create false structure, so a horizontal area is classified only after the surrounding supply-demand balance is analyzed.

Read a break by how it occurs

A supply line broken with expanding volume or a material price advance is read as demand being released. A nearly perpendicular supply line that then yields to a vigorous rally is read as an oversold, climax-type condition.

Test a trend-changing rally on both surfaces

After a trend-changing rally, a one-point figure chart is used to estimate recovery height. That height is then checked against the vertical-chart supply line to test whether technical weakness has flipped to technical strength.

Watch the apex for compression

When a redrawn support line and a new supply line cross, the apex marks compression toward a springboard. One-point and three-point figure charts often make that apex and the line angles clearer because they condense history and omit a time scale.

Treat the parallels as hints

Failure of price to reach, or a pullback from, an overbought or oversold parallel is treated only as a hint of a coming change in pace or direction. It is judged with the rest of the chart, not as a mechanical crossing rule.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
2 of 21 in the Wyckoff method track
19871-4 pp.Next on Wyckoff methodStand down or rehearse on paper when a Wyckoff read failsMarket work is both a perseverance test and an analytic test, so chart technique is only half the procedure.
All readings on this track · 21 readings
  1. 1986Figure-chart construction, counts, and halfway tests
  2. 1986Constructing Wyckoff trendlines on vertical and figure charts
  3. 1987Stand down or rehearse on paper when a Wyckoff read fails
  4. 1987Wyckoff campaign phases as one enter, exit, or stay-out procedure
  5. 1990Two-bar narrow range as a countdown to the next open
  6. 1991Channel location as a remaining-room test
  7. 1991Swing relative strength versus an index proxy
  8. 1991After a Wyckoff bias, rank leftover cause and keep three-to-one stops
  9. 1991Timing individual issues to general-market turns
  10. 1991Constructing a halfway volume map for range resolution
  11. 1998Wyckoff action sequence as a classroom chart drill
  12. 1999Hand-plotted point-and-figure trendlines and Wyckoff counts
  13. 2000Constructing volume confirmation from recent activity
  14. 2007Diagnose the range on bars, then count it on point and figure
  15. 2011Wyckoff cause count and spring tests
  16. 2014Reading the 2008-14 DJIA as a Composite Operator campaign
  17. 2015Confirm a price-action pivot only after independent signals agree
  18. 2016A double top stays unfinished until candles show control
  19. 2016Wyckoff's early clerkship as a campaign-reading case study
  20. 2016Reading campaign phases as a live drill
  21. 2017Three clocks on the same crowd life cycle
By fieldTrend and channels228 readingsBy year198633 readings
All 33 readings tagged Wyckoff method
Also on Wyckoff method5 readings
1999Hand-plotted point-and-figure trendlines and Wyckoff counts1986Figure-chart construction, counts, and halfway tests1986Force, a tested spring, and the conservative count1991After a Wyckoff bias, rank leftover cause and keep three-to-one stops1991Timing individual issues to general-market turns