Crypto academy week 16 || Homework post for fendit | Wyckoff Method
My Dear Steem Friends,
This is @kawsar from Bangladesh.
- Share your understanding on "Composite Man" and the fundamental laws. What's your point of view on them?
- Share a chart of any cryptocurrency of your choice (BTC or ETH won't be taken into account for this work) and analyze it by applying this method. Show clearly the different phases, how the volume changes and give detail of what you're seeing.
Wyckoff Method:
Wyckoff Method was Developed by Richard Wyckoff in the 1920. Richard Wyckoff Was a great technical analysis person. Richard Wyckoff's method is designed or structured in such a way that a very good decision can be made for any trading and this decision can be much more profitable. It helps a trader a lot to know when to enter the market and when its price is trending and range. This concept helps to understand where the market is now and also helps to predict future market trends.
Composite Man
In order for the general public to better understand the movement of the market price, Richard Wyckoff came up with the idea, naming it "Composite Man". This Composite Man is actually just a character. Which will instruct us about the bad situation in the market and about the good situation. They will play with us for our problems and we have to understand his mentality and play with him who is useful to us. How much we can gain in this trade depends on ourselves. How much we can gain using this Composite Man depends on our qualifications. Richard Wyckoff also said that if the concept of this composite man is understood, then trading must be profitable, but we must understand it well.
According to Richard Wyckoff, the strategy of this composite man can be identified in the chart and predicted. So any trader can learn from this composite main and take advantage of it in the market. This composite man of Richard Wyckoff revolves around the market cycle, which Richard Wyckoff has identified in four phases. Understanding these four aspects of Composite Men can give any trader a good entry into the market and a good time. So a trader must have an idea and understand about these four issues. Only then will he be able to succeed in the market.
Those are the four points of Richard Wyckoff:
- Accumulation
- Uptrend
- Distribution
- Downtrend.
Accumulation
The first task of the composite man is to first collect the assets of the investors. composite man will attract investors. The lower the price he has collected from them, the more he will be persuaded to buy at a lower price.
Uptrend
One thing we all know is that in any market, demand and supply are two things. The job of the composite man in this phase is to increase the price of the composite man when the investor's assets are deposited. Then other investors will see the price increase and they will be encouraged to buy it and when more people start buying it the demand will increase and the price will go up more.
Distribution
At this stage, it is the job of the composite man to start selling what he bought, to buy what he buys later. Since the price was going up then he started this sale and sold it before it went down trend.
Downtrend.
At this stage, Composite Man has sold many of its parts before, some of which will be sold at this stage. As it will be sold at this stage and everyone will try to sell its parts at this stage so the supply will be more than the demand so the price will go down.
What are the Fundamental Laws?
According to Richard Wyckoff, fundamental law is based on three basic laws. Which determines the current position of the market and can give direction in which direction it will go. Below are three topics
Supply and Demand
We all know that if the supply is less than the demand then the demand increases, and then the price also increases and if the supply exceeds the demand then the demand decreases. And then the price goes down. And we take advantage of buying a cryptocurrency at this low price and then when there is a demand for it, many people buy it and when the price goes up, we can make a lot of profit from it.
Cause and Effect
We reach the stage of submission where the demand is much higher than the supply and because of this demand the price goes up and we see that the prices go up and then when we come to sell it, many people come to sell this property. Due to which the sale stops and its price goes down.
Effort and Result
Price changes may or may not change the volume. Volume changes. If the price and the volume remain the same, the price is likely to continue. There is no correlation between price and volume but this is where the market ends
Every cryptocurrency investor wants to make a profit. Because those who invest everywhere hope that he will benefit. And to make a profit, everyone in this cryptocurrency market wants to buy the coin at the lowest price and sell it at the highest price. And Richard Wyckof's Composite Man will do a lot for us to do this. Because there are four options in this system. If we have knowledge about these four and understand and apply them then we can definitely benefit by investing in cryptocurrency. I can buy at the lowest price and sell at the highest price with the help of Composite Man.
Share a chart of any cryptocurrency of your choice and analyze it by applying this method. Show clearly the different phases, how the volume changes and give detail of what you're seeing.
We can see through the screenshot above came to the Accumulation phase, we can see a sideway trends. After that we can see that the price is going up from here and it is located at the top. AndIt's going in a sideways direction then the distribution Phase. After staying here it goes downtrend.
Thank you for being part of my lecture and completing the task!
My comments:
Your explanations were alright.
On the second task, I'm not that convinced, there was almost no analysis on what you submitted and there were a reaccumulation and redistribution phase that you didn't point out. This was the most important part of the homework, to be able to identify the pattern correctly and analyze it the best you could.
Overall score:
4/10