Wyckoff Phases Explained: Accumulation, Markup, and Distribution

Who Was Wyckoff?

Richard Wyckoff studied how large operators accumulated before rallies and distributed before declines. His phase model remains relevant because liquidity still moves in cycles.

Phase A: Stopping Action

Prior downtrend slows. Volatility expands. Supply and demand reach tentative balance. Not yet a buy — the market is testing whether lower prices attract buyers.

Phase B: Building a Cause

Price chops in a range. Institutions absorb float. Higher lows and defended support appear. Time spent here "builds cause" for a future markup.

Phase C: Spring or Test

A sharp dip below support that quickly recovers (spring) shakes out weak holders. Failed breakdowns often precede Phase D.

Phase D: Markup

Demand dominates. Breakouts hold. Volume expands on up moves. Trend followers enter; early accumulators begin distributing into strength.

Phase E: Distribution

Smart money sells into retail enthusiasm. Ranges form at tops mirroring accumulation structure. Failure to make new highs on strong news is a warning.

Automation vs Discretion

Modern platforms encode Wyckoff-style rules: support defense counts, volume climaxes, range compression. DumpMoneyRises Wyckoff detectors run these checks across hundreds of symbols each scan cycle.

Read our About page for how engines combine phase detection with LPPL and flow data.