How the Wyckoff Method Can Change Your Steem and Crypto Trading More Optimally

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Trading Steem with the Wyckoff method can give you a more structured approach to analyzing price movements and making trading decisions. The Wyckoff method, developed by Richard D. Wyckoff in the early 20th century, focuses on understanding market cycles and trader psychology. Here is a step-by-step guide on how to use the Wyckoff method to trade Steem.


Understand the Basic Principles of the Wyckoff Method

Law of Supply and Demand

Prices move based on the balance between supply and demand. If demand exceeds supply, prices rise; conversely, if supply exceeds demand, prices fall.

Law of Cause and Effect

This law states that any significant price movement must be driven by a sufficient cause. In crypto markets like Steem:

Law of Effort vs. Result

This law refers to the relationship between the effort expended to move a price (effort) and the result obtained (price movement). In the context of Steem.

By understanding and applying these three basic laws, you can gain better insight into the price movements of the Steem token and make more informed trading decisions in the cryptocurrency market.


The Wyckoff method uses the Law of Cause and Effect to anticipate price movements by linking phases of consolidation and market activity (cause) to significant price movements (effect). In the Wyckoff Method, 'cause' refers to the accumulation or distribution period in which institutional investors or 'smart money' make their positions, while 'effect' is the price movement that follows this period.

The Principle of Cause and Effect in the Wyckoff Method

1. Cause

2. Effect

Example with Steem Historical Price Data

Let's use historical Steem price data to illustrate how this principle works. Let's say we look at Steem's historical data from recent months.

1. Identify the Accumulation Phase

2. Identify Distribution Phases

3. Price Movement After the Accumulation and Distribution Phase

Using the principle of cause and effect, you can anticipate Steem price movements by analyzing the accumulation and distribution phases and correlating them with the price movements that follow. Analyzing historical data and trading volume helps in determining when the market is in an accumulation or distribution phase and allows you to better predict future price movements.


The Wyckoff method divides the market cycle into four main phases: accumulation, markup, distribution, and markdown. Understanding each of these phases can help traders predict price movements and make better trading decisions. Let’s discuss each phase using the Steem token as an example, and explain how traders can identify the current market phase.

1. Accumulation Phase

Identify the Accumulation Phase

2. Markup Phase

Identify the Markup Phase

3. Distribution Phase

Identify Distribution Phases

4. Markdown Phase

Identifying the Price Decline Phase

To identify the current market phase, traders can analyze Steem’s price and trading volume charts. By understanding Wyckoff’s phases—accumulation, markup, distribution, and markdown—traders can make better trading decisions based on price movement patterns and trading volume.

Following are the steps to identify market phases:

With this understanding, traders can anticipate price movements and plan their trading strategies more effectively.


To apply the Wyckoff Method to trading Steem tokens, you need to follow a step-by-step process that involves identifying the market phases (accumulation, markup, distribution, and price decline) and analyzing for signs of supply/demand testing. Here is a complete guide outlining these steps, with real-world examples using the Steem token:

Step 1: Identify the Accumulation Phase

1.1. Observe the Consolidation Price Pattern

The accumulation phase usually occurs after a sharp price decline and takes place within a narrow price range. Its characteristics include:

Steem Example:
Let’s say the price of Steem drops from $0.70 to $0.30. Over the next few months, the price of Steem moves within a range of $0.28 to $0.35. Trading volume increases over time, but the price remains stable.

Trader Actions:

Step 2: Signs of Supply/Demand Testing

2.1. Price Testing Analysis

After the accumulation phase, the market will start testing supply and demand to determine if there is strength to continue into the markup phase:

Steem Example:

After the accumulation phase, the price of Steem started to rise from $0.35 to $0.50. During this period, price may retest $0.40 with lower trading volume. This is an indication that the market is confirming support and preparing for a markup phase.

Trader Action:

Step 3: Transition to the Markup Phase

3.1. Identifying the Beginning of the Markup Phase

After the accumulation and testing phases, the markup phase begins when price begins to move significantly higher. Signs of the markup phase include:

Steem Example:
Suppose the price of Steem starts to rise from $0.50 to $0.75. Trading volume also increases sharply during the price increase, indicating that the markup phase has begun.

Trader Actions:

Step 4: Monitor the Transition to the Distribution Phase and Price Decline

4.1. Identify the Distribution Phase

After the markup phase, the market may enter a distribution phase, where investors start to sell their positions:

Steem Example:
Suppose Steem price peaks at $0.75 and moves in the range of $0.70 to $0.80 with high trading volume. This indicates a distribution phase.

Trader Action:

4.2. Monitor the Bearish Phase

If the market enters a bearish phase, price will drop significantly:

Steem Example:
If the price of Steem drops from $0.75 to $0.40, with increasing trading volume, this indicates a bearish phase.

Trader Action:

By following these steps and analyzing Steem’s price and trading volume data, you can identify the current market phase and make more informed trading decisions based on the Wyckoff Method.