MBoxwave Volume Analysis Indicators
Richard Wyckoff was a 20th-century pioneer of a trading methodology that he developed after studying how the stockmarket big players were manipulating stocks to lure smaller investors into the market to fleece them from their money. He studied volume in particular by watching the tape, literally watching buys and sells volume being printed bar-by-bar on a tape, and looking for composite operator footprints who are the big players accumulating stocks or distributing them after pushing up the price. He became proficient at volume analysis and began a newsletter to help inform the masses. He founded, wrote and edited The Magazine of Wall Street which had more than 200,000 subscribers. Wyckoff was forced to close down his newsletter because his tape reading skills became so good that large firms subscribed to his stock alerts so they could front run the retail investors. The Wyckoff skills are still valid but are not taught as widely. MBoxwave uses components of Wyckoff methodology to give alerts of “smart money” accumulating, absorbing or distributing enabling those new to trading and those experienced to more easily identify key points in price movements – up or down. Wyckoff wrote down his methodology and sent out details to subscribers who wanted to learn his method. His explanation for studying stocks and using volume in particular was “…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” Wyckoff wanted to teach ordinary investors to see the market as if they were the big players in the market, moving it and profiting from it. This is the value of all the various MBoxwave indicators, they give clues as to how to view the evolving market, bar-by-bar and wave by wave, as to spot the footprints of composite operators and to trade alongside them and not become their victim. A lot of emphasis behind MBoxwave is analysis of supply and demand, because that is the nature of a market of stocks. There are sellers and there are buyers. When you have more sellers than buyers, the market goes down. When you have more buyers than sellers, the market goes up. One of the problems with simply watching volume bars on a chart is that volume can be manipulated. You need to use several tools to avoid being trapped by volume manipulators. MBoxwave provides those tools, you just need to study it to understand when its telling you to be in or out of the market.
By Ahmed