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The Wyckoff Method is based on natural law and human behavior theory, which suggests that all action follows a predictable pattern. The method uses these principles to help investors spot points of overbought and oversold conditions in the market. It also helps identify areas where a stock may be vulnerable to large price fluctuations and volatile price charts.
Richard D. Wyckoff first used the Wyckoff Method as a trader on the floor of the New York Stock Exchange in 1917. While a clerk on the floor of the NYSE, Wyckoff realized an opportunity to capitalize on trading patterns. Heeventually took a position as a trading advisor and rose to the senior trade desk by 1923.