In the years following 1930, Wyckoff and his associates formulated a valuable set of laws, tests, and schematics (see Chapter 6) of Hank Pruden’sThe Three Skills of Top Trading (Wiley 2007). The basic charting, particularly bar charts and point-and-figure charts are used in the Wyckoff method.

The Wyckoff method is a five-step method of market analysis for decision making.

• Determine the present position and probable future trend of the market. Then decide how you are going to play the game. Use bar charts and point-and-figure charts of market index.
• Select stocks in harmony with the trend. If you are playing the game long, select stocks which you believe are stronger than the market. If you are not sure about an individual issue, drop it. Use bar charts of individual stocks.
• Select stocks with cause that equals or exceeds minimum objective. Choose stocks that are under accumulation or reaccumulation. Use point-and-figure charts of individual stocks.
• Determine the stocks’ readiness to move. Rank stocks in order of your preference. Use bar charts and point-and-figure charts of individual stocks; apply the nine tests for buying or selling outlined in Chapters 6 and 7.
• Time your commitment with a turn in the stock market index. Put your stop-loss in place and relax. Then follow through, until you close out the market position. Use bar charts.