The Most Comprehensive Content to Improve Context Analysis by Studying Price Action
Wyckoff and the first readers of the tape understood that the movements of the price do not develop in periods of time of equal duration, but that they do it in waves of different sizes, for this reason they studied the relation between the upward and downward waves.
The price does not move between two points in a straight line; it does so in a wave pattern. At first glance they seem to be random movements, but this is not the case at all. The price is shifted up and down by fluctuations.
Waves have a fractal nature and interrelate with each other; lower grade waves are part of intermediate grade waves, and these in turn are part of higher grade waves.
Each uptrend and downtrend is made up of numerous minor uptrend and downtrend waves. When one wave ends, another wave starts in the opposite direction. By studying and comparing the relationship between waves; their duration, velocity and range, we will be able to determine the nature of the trend.
Wave analysis provides a clear picture of the relative changes between supply and demand and helps us judge the relative strength or weakness of buyers and sellers as price movement progresses.
Through judicious wave analysis, the ability to determine the end of waves in one direction and the beginning in the opposite direction will gradually develop