All language subtitles for Who is Richard Wyckoff - Richard Wyckoff Trading Methods (720p, h264)

The stock market is a riddle to most.

Millions of people risk their capital on
what they believe is a matter of chance

or privileged information, only to meet
with consistent failure.

But in the late 19th and early 20th
centuries, one man dedicated his life to

transforming this riddle into a readable
science.

He conducted a deep and intimate study
within the very heart of Wall Street,

through decades of persistent
observation and practice, he found that

has a language of its own.

To those who can read it, it tells its
own future story.

His name was Richard D. Wyckoff, and
this is the story of how he learned to

it, and in turn taught others to do the
same.

His journey began not in a university,
but in the real arena of finance, where

theory gives way to harsh reality.

In 1888, at the young age of 15, Richard
Wyckoff started his career on Wall

Street as a stockrunner for a small
brokerage firm.

The world he entered was a cauldron of
raw, untamed capitalism.

It was an era of financial titans whose
names alone could sway markets, men like

J .P. Morgan, James R. Keene, and E .H.
Harriman.

It was also an era of profound danger
for the common man, a landscape rife

manipulative stock pools, treacherous
bucket shops designed to fleece the

unwary, and a near total absence of the
transparency and regulation that are

commonplace today.

This environment, perilous and electric,
became Wyckoff's classroom.

From his position, he had an unfiltered
view of the actions of every class of

market participant, and he was, above
all else, a persistent student of the

security markets.

What Wyckoff witnessed day after day was
a grand and recurring tragedy of

financial self -destruction.

This tragedy was not born of malice, but
of a few simple yet devastating flaws

in human nature when confronted with the
allure of easy money.

He observed that the majority of people
who came to the street were almost

totally ignorant of the business they
were venturing into.

They were, as he later described it,
mentally lazy.

A man who was otherwise shrewd, careful,
and successful in his own established

business would arrive in the financial
district and promptly abandon all

caution.

His desire was not to learn the
intricate machinery of the market, but

given a tip, to be told something good
to buy.

This approach, he quickly realized, was
not speculation.

It was pure gambling.

True speculation, as he learned to
define it, involves the use of

foresight.

Yet most people he saw used neither.

They were driven by two primal emotions,
the hope of profit and the fear of

loss, causing them to drift aimlessly in
the market's powerful currents.

A ruinous habit, he observed, was their
tendency to accept a small profit with

nervous excitement while simultaneously
tolerating a large and growing loss with

stubborn hope.

This single pattern of behavior was so
common and so destructive that it formed

the very business model of the bucket
shops that littered the financial

landscape.

These early stark observations
solidified in Wyckoff's mind the

problem he needed to solve.

If the path of the average man, guided
by emotion and ignorance, led invariably

to ruin, then the path to success must
be its polar opposite.

Success required a method.

a set of logical, repeatable principles
to replace the chaos of hope and fear.

It required a science for navigating the
market.

Wyckoff's formal education in this new
science began at the suggestion of his

first employer, who encouraged the young
man to begin studying railroad and

other corporation statistics.

He dedicated his nights to this pursuit,
diligently poring over financial papers

and studying the probable future value
of various securities.

When he lacked the funds for an actual
purchase, he made imaginary trades,

recording his selections in a notebook
and, most importantly, the reasons for

his decisions.

He would later champion this method of
study, advocating for years of paper

trading before an individual should risk
a single dollar of real money.

He practiced what he preached.

He did not make his first real
investment until he had been studying

years, and he did not begin active
trading for another six years after

He was building a foundation of
knowledge that he knew would be

His first foray into the market was the
purchase of a single share of St. Louis

and San Francisco common stock at $4 per
share.

As he slowly accumulated more capital,
he bought more one -share lots, a

practice he continued until his chosen
brokerage firm, annoyed by the small

commissions, informed him they no longer
desired his business.

This forced him to buy larger quantities
of fewer stocks, but his early

experience with odd lots taught him a
crucial lesson.

He found that even when his fundamental
analysis of a company's financial health

and earning power was perfectly correct,
the stock's price would often fluctuate

widely due to external forces.

A stock with excellent prospects might
decline simply because the general

was weak.

From this... He concluded that three
primary factors governed a stock's

movement, its intrinsic value and
earning power, the manipulative forces

upon it, and the overwhelming trend of
the market itself.

This realization marked a pivotal shift
in his focus.

He understood that to succeed, he had to
look beyond the balance sheet of a

single company and begin to analyze the
behavior of the entire market and, most

importantly, the powerful men who moved
it.

To truly understand these forces,
Wyckoff knew he had to get closer to the

of the machine.

He secured a position with a leading New
York stock exchange house that handled

a large volume of business for the most
prominent operators of the era.

There he began to analyze the market not
from the perspective of an outsider,

but from the standpoint of an insider
who was a factor in influencing prices.

These prominent operators were the
financial titans of their day.

men who commanded enough capital to
operate the price of a stock through

coordinated campaigns of buying and
selling.

He studied their methods with the
intensity of a scientist observing a new

phenomenon.

One of these men was James R. Keene, a
brilliant and feared operator who

dominated the street.

Wyckoff observed Keene trading over his
ticker and saw firsthand the immense

concentration and nervous energy
required, even for a master.

Keen's admission that he was doing well
if he was right six times out of ten

taught Wyckoff a valuable lesson about
the fallibility of even the greatest

traders and the necessity of managing
losses.

Another was E. H. Harriman, the
legendary railroad magnate who had built

empire through brilliant financial and
operational maneuvering.

Wyckoff learned from Harriman the
importance of foresight, of seeing the

value in assets that others had
discarded.

Crucially, Harriman.

who began his own career as a floor
trader, advocated for the absolute

limitation of risk, a principle that
became a cornerstone of Wyckoff's own

methodology.

The most dominant figure of all was J
.P. Morgan, the powerful banker who

as America's de facto central banker
before the creation of the Federal

Morgan's ability to foresee and
orchestrate vast changes in the

industrial landscape was unparalleled.

His formation of massive corporations
like U .S. Steel demonstrated the

power of organized capital to shape the
market.

Wyckoff also studied the methods of
Jesse Livermore, perhaps the most famous

speculator of the 20th century.

Livermore's genius lay in his highly
disciplined approach.

He described to Wyckoff his core
principles.

Unless a stock showed him a profit
within a few days, he would close the

reasoning that his timing was wrong and
his capital could be better employed

elsewhere. He would not allow hope to
influence his decisions.

He used both a price stop to limit his
monetary loss and a time stop to prevent

his capital from becoming stagnant. And
as we hear these names and stories from

a century ago, it's natural to feel a
gap between that world and ours.

How can we truly grasp these lessons
without understanding the context in

they were learned?

This is precisely the bridge that Max
Davidson's unique new edition of Richard

Wyckoff's masterpiece, How I Trade and
Invest in Stocks and Bonds, was created

to build.

This is not just a reprint.

It is a guided tour through the mind of
a Wall Street legend, meticulously

adapted for the 21st century trader.

The original text has been updated to
make the language modern and clear.

but the real treasure lies in over 50 in
-depth annotations.

These notes explain the crucial context
behind the names you've just heard, the

inner workings of the bucket shops, the
true power of magnates like J .P.

Morgan, and the specific market
conditions behind Wyckoff's most famous

It transforms a historical document into
a practical, actionable playbook.

For anyone who wants to truly
internalize the lessons we are

annotated edition is an essential volume
for your library.

The link to get it is in the description
below.

With this deeper context in mind, we can
better appreciate what Wyckoff

discerned by observing these masters.

He saw a common pattern.

Their success was not based on guesswork
or random tips, but on a deep

understanding of market mechanics,
supply and demand, and math psychology.

They did not follow the crowd.

They anticipated the crowd's predictable
emotional behavior and used it to their

advantage. They planned their campaigns
meticulously.

First, they would quietly accumulate a
large line of stock at low prices, a

process that could take weeks or months,
preferring to buy when the market was

dull and depressed.

This phase was designed to acquire
shares without advancing the price.

Once their accumulation was complete,
they would begin the mark -up phase.

They would advertise the stock on the
tape by making it active and strong,

generating excitement and attracting
public buying.

This activity, often accompanied by
bullish rumors and news, would drive the

price higher.

Finally, at the peak of the public's
excitement, when the news was

positive, they would begin the
distribution phase, selling their large

to the very public they had lured in.

This transfer of stock from strong,
informed hands to weak, uninformed hands

left the stock in a technically
precarious position, ready for a

Wyckoff's objective became crystal
clear.

He had to decode these campaigns.

He had to learn to spot the thumbprints
on the tape left by these large

operators so that he could follow them
with pleasure and profit.

This intense focus on the market's own
actions led Wyckoff to the stock ticker

tape, the primary source of real -time
price and volume data in his era.

He began to see that the tape was far
more than a simple record of

It was a running commentary on the
balance of power between buyers and

He realized that the basic law of supply
and demand governed all price changes.

and that the best indicator of the
future course of the market was the

relationship between this supply and
demand.

He saw that the action of stocks
reflected the plans and purposes of

dominated them, and that by studying the
tape it was possible to judge what

these masterminds were doing.

Every transaction he reasoned
represented a meeting of minds.

By analyzing not just the price but the
volume of shares traded, One could

measure the force of the buying power or
selling power, the eagerness of the

buyers and the anxiety of the sellers.

The tape, in essence, was a record of
market psychology in motion.

It told the news minutes, hours, and
sometimes days before the newspapers.

Everything from a corporate development
to a Supreme Court decision was

reflected first upon the tape as those
with advanced knowledge made their

These studies were first codified in his
influential book, studies in tape

reading, a work that laid out one of the
first systematic approaches to

technical analysis.

Initially, he used these principles for
active, day -to -day trading.

However, he soon found that the same
principles could be applied with even

greater success and far less nervous
strain to the intermediate swings of the

market.

Those movements of 5, 10, or 20 points
that typically unfold over several weeks

or months

It was in these larger swings that the
campaigns of accumulation and

distribution were most clearly defined
and offered the greatest opportunities.

To simplify the complexities of the
market, Wyckoff developed his central

interpretive concept, the composite man.

He urged his students to cease thinking
about the market as a chaotic collection

of thousands of individual traders and
instead to view its action as the

expression of a single mind.

Let us call him the composite man, he
wrote.

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

profit if you do understand it.

This composite man represents the
amalgamation of all the shrewdest, most

-informed operators and financial
interests.

He is the epitome of smart money.

He is cool, calculating, and patient.

His purpose is to conduct well -planned
campaigns to accumulate stocks at low

prices and then distribute them at high
prices.

He advertises his stocks on the tape by
making them active and strong to attract

a public following when he wishes to
sell.

He makes the stock look weak and
triggers raids to frighten the public

selling when he wishes to buy.

The Wyckoff student's job is not to
fight the composite man.

but to recognize his operations as they
unfold on the charts and on the tape,

and to take a position in harmony with
him.

By studying the market as if it were the
result of one man's operations, the

entire process of analysis becomes
vastly simplified.

One no longer asks, what are thousands
of people thinking?

But rather, what is the composite man
doing now?

Is he accumulating, or is he
distributing?

This single powerful concept cuts
through the noise and confusion of the

allowing the analyst to focus on the
true story of supply and demand.

As Wyckoff's understanding deepened and
his own success grew, his focus shifted

increasingly toward education.

He felt a strong responsibility to share
the principles he had uncovered.

This mission led him, in the midst of
the panic of 1907, to found a magazine

called The Ticker, which he later
renamed the magazine of Wall Street.

He had two primary motivations.

First, he found that the process of
writing out his thoughts helped him to

clarify and crystallize the principles
that guided his own operations.

Second, and more importantly, he aimed
to demystify the market for the public.

He had seen firsthand that the public's
greatest handicap was its ignorance of

the real rules of the game.

He wanted to emphasize that success on
Wall Street was not a matter of luck or

mysterious connections, but of common
sense combined with dedicated study and

practical experience.

His magazine quickly became a hub for
those seeking a deeper understanding of

the market.

He received countless inquiries from
anxious investors, and he examined

trading ideas and mechanical systems
sent to him by subscribers.

This process of teaching and interacting
with others further honed his own

methods.

He saw that most clients wanted to lean,
not to learn.

He believed that the only way for a
broker to build a base of permanent

successful clients was to educate them,
to teach them how to make their own

sound decisions.

This philosophy was radical for its
time, but it was the core of his life's

work.

His ultimate goal was to provide
investors and traders with the tools for

-reliance. to help them graduate from
the class of the uninformed public to

ranks of shrewd independent operators.

This lifetime of observation, practice,
and teaching culminated in the

formulation of the Wyckoff method.

It is not a rigid mechanical system, but
rather a school of thought, a logical

framework for market analysis based on
judging the market by its own action.

The method is founded upon three
fundamental laws that govern all price

movement.

The first and most essential is the law
of supply and demand.

This is the axiom upon which everything
else is built.

When buying demand is greater than
selling supply prices must advance.

When supply overcomes demand prices must
decline.

When the two forces are in equilibrium
prices move sideways in a trading range.

The tape readers and chartists' entire
purpose is to gauge the present and

future relationship between these two
forces.

The second is the law of cause and
effect.

This law states that for every effect of
price movement, there must be a

preceding cause.

The cause is the process of accumulation
or distribution within a trading range.

The effect is the subsequent markup or
markdown.

The extent of the effect or the size of
the price swing.

is often in proportion to the extent of
the cause.

A long period of accumulation,
therefore, builds a cause for a

advance.

By analyzing the duration and intensity
of trading within this cause -building

area, one can often project the probable
extent of the coming move.

This transforms speculation from a mere
guess into a logical deduction based on

the evidence of preparation.

versus result here effort is represented
by the volume of trading while the

result is the price movement that
follows harmony between effort and

confirms the trend for instance if
trading volume expands significantly on

advance and the price moves up sharply
the result is in harmony with the effort

and a continuation of the advance can be
expected however A divergence between

effort and result is a critical warning
sign of a potential change in trend.

If volume is very high, great effort,
but the price makes little or no upward

progress, poor result, it indicates that
a large supply of stock is meeting the

demand and halting the advance.

This is often a clear signal that a
turning point is near.

Conversely, if volume diminishes
significantly during a decline and the

stops falling, It shows that the selling
pressure effort is drying up and a

rally may be imminent.

The practical application of these three
laws is found in the analysis of the

four -phased market cycle, accumulation,
markup, distribution, and markdown.

During the accumulation phase, the
composite man is quietly buying a stock

others are ignoring or selling.

This often occurs after a significant
decline and is characterized on a chart

a trading range where volume tends to
diminish on reactions, indicating that

selling pressure is being exhausted.

Once the informed interests have
acquired their desired line of stock,

markup phase begins.

The price is actively pushed upward,
attracting public buying and often aided

the timed release of bullish news.

As the advance continues and public
excitement reaches its peak, the stock

enters the distribution phase.

Here the composite man begins to sell
the shares he accumulated at lower

to the enthusiastic but uninformed
public.

This phase is often marked by heavy
volume without significant further

progress, a clear sign of effort without
result as large supply absorbs the

frenzied demand.

Once the stock has been transferred from
strong hands to weak hands, it is

technically vulnerable, and the markdown
phase follows.

This is the path of least resistance,
downward.

The public, having bought near the top,
is forced to sell in a panic, adding to

the selling pressure and accelerating
the decline.

This cycle repeats itself constantly in
all time frames.

The Wyckoff students' primary task is to
use charts.

both vertical line charts for price and
volume and figure charts for measuring

cause.

Not as mechanical predictors, but as
visual tools to identify which phase the

market is in and to align his actions
with the composite man.

Wyckoff's ultimate goal was never to
create a legion of disciples who would

blindly follow his personal judgment.

On the contrary, his entire philosophy
was built upon the principle of self

-reliance.

He consistently maintained that it is
better to depend on one's own judgment

than on that of any other person.

The money that does the most good, he
believed, is the money made through

own efforts.

Therefore, his true legacy is not a list
of famous followers but the method

itself, a logical, teachable framework
that empowers the individual.

He was one of the first to take the
chaotic art of tape reading and

into a structured science.

His real successors are the thousands of
students and readers who have used his

principles to move from the ranks of the
uninformed public, who are generally

wrong, to the class of astute,
independent operators who think for

This requires diligent work.

He often lamented that people succeed in
business because they study their

mistakes, yet few apply this same rule
to their trading.

The study of the market is a serious
undertaking.

a business that requires training,
capital, and courage.

The principles he laid down are not a
guaranteed formula for riches, for no

thing exists.

They are a guide to understanding, a way
to substitute knowledge for gambling,

and a means to cultivate the foresight
that is the very essence of successful

speculation.

The market will always be a challenge, a
test of one's judgment and self

-control.

But it is not an indecipherable mystery.

It speaks a language, and the purpose of
Richard Wyckoff's life's work was to

give every persistent student the tools
to understand it.