Trades About to Happen: A Modern Adaptation of the Wyckoff Method

by David H. Weis

Quick Summary

David Weis modernizes Richard Wyckoff's century-old method of reading price and volume to anticipate institutional supply and demand. The book covers drawing support and resistance lines, interpreting the story told by price bars and volume, identifying springs (failed breakdowns) and upthrusts (failed breakouts), recognizing absorption patterns, and reading the tape through wave analysis. With a foreword by Dr. Alexander Elder, it presents the Wyckoff method as a timeless framework for understanding market structure.

Detailed Summary

David Weis's "Trades About to Happen" is a practical modern treatment of the Wyckoff method, a price-and-volume analysis framework developed by Richard Demille Wyckoff in the early 1900s. The book's title comes from Philostratos: "The wise perceive things about to happen."

The Wyckoff method is built on the premise that price and volume action reveals the intentions of the large institutional operators (the "composite operator") who drive market movements. By reading the relationship between price spread, closing position within the bar, and volume, a skilled analyst can identify when institutions are accumulating (buying) or distributing (selling), and can anticipate the resulting breakout moves.

Chapter 1 provides an overview of where to find trades: at the edges of trading ranges, at support and resistance levels, and at points where supply and demand are clearly imbalanced. Chapter 2 covers the mechanical skill of drawing horizontal support and resistance lines, with emphasis on letting the market define these levels rather than imposing arbitrary ones.

Chapter 3, "The Story of the Lines," is where the method comes alive. Weis teaches how to read the narrative told by each bar's price spread, close position, and accompanying volume in relation to surrounding bars and previously established support/resistance. High volume with narrow spread and a close near the low suggests selling pressure being absorbed by buyers (demand overcoming supply). Wide spread up on high volume with a close near the high shows strong demand.

Chapters 4-7 cover the core Wyckoff patterns. Chapter 4 presents the logic of bar chart reading in detail. Chapter 5 covers springs -- situations where price briefly penetrates support on declining volume, then reverses upward, indicating that the apparent breakdown was a shakeout designed to trap sellers and absorb remaining supply. Chapter 6 covers the mirror-image upthrust -- a brief penetration of resistance that fails and reverses downward. Chapter 7 discusses absorption, where large operators gradually accumulate or distribute positions within a trading range.

Chapter 8 provides extended chart studies applying these concepts to real markets. Chapters 9-10 cover tape reading through wave analysis, where the analyst tracks the cumulative volume on each upwave and downwave to determine whether buyers or sellers are more aggressive. Chapter 11 applies point-and-figure and renko charting techniques within the Wyckoff framework.

The book is richly illustrated with annotated charts created in TradeStation and MetaStock, making the abstract principles concrete and recognizable.