Diagnose the range on bars, then count it on point and figure

A two-chart workflow

This editorial article treats the archive workflow as a two-chart lesson in pattern recognition. Diagnose supply, demand, and effort versus result on the bar chart. Then convert the completed trading range into a point-and-figure count that can be checked before a breakout is treated as a trade.

Editorial stance: the method is not reduced to a single pattern name. The chart is read as a sequence of conditions that can support or reject a buy or sell hypothesis.

How the method is taught

The Wyckoff method is taught as a five-step process supported by accumulation schematics, phase breakdowns, and decision-rule checklists rather than as a single pattern label.

The composite-operator stance asks what the dominant professional interest is doing behind the scenes when a chart is diagnosed.

Three laws organize the method: supply and demand on bar charts via price and volume, effort versus result via price-volume disharmony, and cause and effect via the trading-range count on the point-and-figure chart.

Diagnose the range on the bar chart

Supply and demand are read on the bar chart through price and volume. Effort versus result is the check for disharmony, such as price advancing on diminishing volume, treated as a warning that the prevailing direction may be changing.

Point-and-figure is used after the bar chart, not to measure supply and demand directly, but to convert a completed range into a box-count projection for extent, risk/reward, and exit alerts.

Editorial reading: accumulation is the sideways trading range treated as the building of a cause. The later count measures that cause. It does not replace the bar-chart diagnosis.

Transfer the last point of support or supply

Last point of supply or last point of support is first marked on the bar chart, then transferred to the equivalent point-and-figure location to begin the arithmetic count of boxes times box size.

The count is an arithmetic projection equal to the number of boxes times the box size, used to set a minimum objective and to compare reward with risk.

Cause and effect is the rule that the width of a completed trading range on a point-and-figure chart is treated as the cause whose effect is a subsequent trend of comparable extent.

A conservative inverse-head-and-shoulders count

In a 2002-03 Dow Jones Industrial Average base described as an inverse head and shoulders with the head low at the 7200 level, a conservative count from the right shoulder over the left produced a minimum upside projection of 14400.

Editorial note: that inverse-head-and-shoulders count is used here only to show how a completed base is transferred into a minimum objective. It is not a claim about later performance.

Tests before the breakout is treated as a trade

After a range changes from down to sideways to up, the method still requires a reward-versus-risk check against the point-and-figure count before the breakout is treated as established.

Nine buying and selling tests combine vertical-chart and figure-chart conditions, including weaker-than-market behavior, a broken upward stride, lower tops, lower supports, a crown, and an estimated profit of at least three times the indicated risk.