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Fuente: Pruden & von Lichtenstein, Wyckoff Schematics (MTA 2006); Jim Forte, Anatomy of a Trading Range (MTA 1994); Wyckoff Analytics teaching. Pruden's schematics formalise the phases A–E described here.

Prerrequisitos

Three Wyckoff laws — in particular the law of cause/effect — and Four-phase cycle, of which the range is the sideways component.

What it is, and why it is not a pause

A trading range is the area where the previous move — up or down — exhausts itself and supply and demand enter relative equilibrium. On the surface it looks like inactivity: price oscillates in a band with no clear direction. In reality it is the most intense moment of the campaign. This is where the Composite Man does the work that matters — he accumulates, buying more than he sells and absorbing the public's supply without pushing price up too much, or he distributes, unloading his positions to late buyers without making price crash. The range, in other words, is cause under construction (law 2): the longer and wider it lasts, the more material changes hands and the more extended the subsequent effect can be.

Anatomy: edges, creek, and ice

The edges of the range are defined by the events that generate them. Support arises from the selling climax and is redrawn by the subsequent tests and, in phase C, by any spring; resistance arises from the automatic rally and is tested by the upthrusts. Between the two edges runs a less obvious but central structure in the tradition of Robert Evans (SMI): the creek, the wavy line joining the small internal highs of the range. The creek is the stream price must «jump» to exit toward markup: clearing it with volume is the Jump Across the Creek (JAC), i.e. a SOS, and the return to the freshly conquered edge is the back-up to the edge of the creek, i.e. the LPS. In distribution the mirror structure holds, which some schools call ICE (the inverted equivalent of the creek): an internal support that, once lost, becomes the ceiling for weak rallies.

Cause and effect: measuring the box

The reason the range deserves attention is that its width can be converted into an objective. The cause — duration and width of the congestion — is quantified with the horizontal count on the Point & Figure chart and projected into an effect, i.e. a minimum price objective for the exiting move. The number is not a guaranteed ceiling but a ruler: it says how much potential has been loaded and lets you discard setups where the expected reward is not backed by sufficient cause.

Full procedure and the distinction between bar-chart phases and count phases: Cause count with P&F.

Phases A–E: the internal evolution

Every significant trading range passes through five internal phases, from A to E, which describe the passage from the halt of the previous trend to the start of the new one. These are the phases that Pruden's schematics formalise and that should be read in detail in the dedicated entries, because they change sign between the two types of range.

• Accumulation phases A–E — from the halt of the downtrend to markup.
• Distribution phases A–E — from the halt of the uptrend to markdown.

Accumulation or distribution? The problem of context

The same rectangle on the chart can be accumulation or distribution: the difference is not in the drawing but in the events, the volume, and the position in the cycle. Distinguishing the two cases is the range's central analytical task, and the most costly mistake is assuming one for the other.

How to work the range, phase by phase

The operational principle is not to trade the internal oscillations but to wait for the range to declare the direction and magnitude of the exit, typically in phase C–D, when the reward/risk becomes favourable.

Summary card

Enlaces

• accumulation-phases-a-e
• distribution-phases-a-e
• count-causa-point-figure-wyckoff
• spring-wyckoff
• sign-of-strength-sos
• tradizione-wyckoff