Classifying Wyckoff Market Phases and Projecting Cycle Amplitude
Summary
The Market Cycle Projection Engine turns a Wyckoff-inspired cycle model into a five-state indicator: Accumulation, Markup, Distribution, Markdown, and Transition. It classifies bars using normalized linear-regression slope, the ratio of fast to slow ATR, and close position within the cycle range. Trending phases require directional slope and expanding volatility; near-flat readings are split into accumulation or distribution by price position, with Transition covering other combinations.
For a forward projection, the indicator extends a recent cycle amplitude in the direction assigned to the next rotation. It offers cycle-average, last-cycle, and ATR-multiple measurement modes, and presents the projection as a typical move rather than a price target. Suggested uses include aligning entries with phase changes, filtering out transition conditions, and using the mid-cycle level for possible mean reversion. The article also explains implementation choices for ProBuilder, including manual regression-slope calculation and drawing only on the latest bar. The thresholds and trading suggestions are heuristic; no backtest or evidence of predictive performance is supplied.
Key ideas
- The classifier combines ATR-normalized regression slope, volatility regime, and price position within a lookback range.
- Markup and Markdown require directional slope together with expanding volatility, while flat conditions are separated by cycle position.
- The projection estimates recent cycle amplitude and points toward an anticipated next rotation rather than extending the current trend.
- Transition is a catch-all state that the article suggests using as a filter for directional trades.
- The indicator’s thresholds and trade applications are presented without backtest evidence or validation of predictive accuracy.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.