"Wicks off for Wyckoff" - filtering the noise out of charts

by David

So, here are my current thoughts about what is happening... I have found it extremely hard to pick up on the Wyckoff characteristics of the price action of the last month or two. Then it hit me..... There is simply too much noise on the chart.

So I turned the wicks off my chart, and lo and behold... Hit me like a ton of bricks. Extremely volatile price action has been keeping me from seeing the obvious.

Now, don't get me wrong. Wicks are important, they can give us lots of clues about imminent price action, but they can also give you a lot of unnecessary feedback. The one fundamental thing in trading that every consistent trader will tell you is PRICE CONFIRMATION. So what is price confirmation? Price confirmation is the BODY of the candle making a firm and resolute statement telling you that "ok, everyone is in." These confirmation candles are usually a tell tale sign that price is ready to follow a specific trend (especially after a trend line break ). The higher the timeframe, the better the confirmation.

In this instance, I wanted to use this same type of confirmation method and deploy it to a Wyckoff trading range.

So my current theory is that we are inside the upthrust phase of the smaller Wyckoff Distribution phase in purple in the middle of the chart... Which is also playing a key role in the setup of a much larger Wyckoff distribution in the gray box.

I want to make it clear that you shouldn't be looking at the time/dates in my chart, the lines just give you an overall price action overview. I cannot tell you when these events will happen, I can only give you an overview of how it should play out.