Here's a way 2 seemingly different "labels" of price action via Wyckoff and Candles are actually the same thing. First of all, in the Morris book, candle "patterns" (which are really principles of supply and demand) are divided into 2 groups, Reversal and Continuation. This is precisely Wyckoff, though he speaks of it in terms of accumulation/distribution (reversal) or re-accumulation/re-distribution (continuation). (In fact, this is also Edwards and Magee.)
Now take for instance the Morning/Evening Star Candle Reversal pattern. Morris on the Morning Star: "...a long black body followed by a small body which gaps lower. The 3rd day is a white body that moves into the first day's black body." He elaborates somewhat further that "a downtrend has been in place..." but doesn't go much deeper than that. I think this is one of the problems w/his book, it's too shallow, he doesn't go far enough in his analysis of price action. Wyckoff does. A reversal is usually preceded by some kind of climatic behavior, an overbought/oversold condition in an established trend. This may be indicated by a sudden acceleration of the trend, increased volume and volatility and momentum, a break of a channel supply or demand trendline, wide spreads closing at the extremes relative to previous bars and occurring at significant areas of support and resistance, and/or so on...
So on the first bar of the Morning Star pattern (bullish reversal), Wyckoff would be looking at possible cumulative climatic price action developing, then when the next bar is so relatively narrow this would suggest possible exhaustion of supply, or as Morris says, "indecision". Then the wide spread up (preferably closing near the high) on the 3rd day indicates, at the very least, an automatic rally, when the sellers have been exhausted, at least for the moment. Again, Morris is too confined, he doesn't elaborate as does Wyckoff, who describes the entire subsequent process of retracement, follow-thru, possible trading-range, and so on. Wyckoff also describes that there are infinite variations of this "pattern".
Edwards and Magee, in their analysis of their famous "Island Reversal Pattern", write: "A compact trading-range, usually formed by a fast rally or reaction, which is separated from the previous move by an Exhaustion Gap, and from the move in the opposite direction which follows by a Breakaway Gap." So, that's Wyckoff, Morris, and E&M, all describing the same underlying price behavior in different terms.
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Now take for instance the Morning/Evening Star Candle Reversal pattern. Morris on the Morning Star: "...a long black body followed by a small body which gaps lower. The 3rd day is a white body that moves into the first day's black body." He elaborates somewhat further that "a downtrend has been in place..." but doesn't go much deeper than that. I think this is one of the problems w/his book, it's too shallow, he doesn't go far enough in his analysis of price action. Wyckoff does. A reversal is usually preceded by some kind of climatic behavior, an overbought/oversold condition in an established trend. This may be indicated by a sudden acceleration of the trend, increased volume and volatility and momentum, a break of a channel supply or demand trendline, wide spreads closing at the extremes relative to previous bars and occurring at significant areas of support and resistance, and/or so on...
So on the first bar of the Morning Star pattern (bullish reversal), Wyckoff would be looking at possible cumulative climatic price action developing, then when the next bar is so relatively narrow this would suggest possible exhaustion of supply, or as Morris says, "indecision". Then the wide spread up (preferably closing near the high) on the 3rd day indicates, at the very least, an automatic rally, when the sellers have been exhausted, at least for the moment. Again, Morris is too confined, he doesn't elaborate as does Wyckoff, who describes the entire subsequent process of retracement, follow-thru, possible trading-range, and so on. Wyckoff also describes that there are infinite variations of this "pattern".
Edwards and Magee, in their analysis of their famous "Island Reversal Pattern", write: "A compact trading-range, usually formed by a fast rally or reaction, which is separated from the previous move by an Exhaustion Gap, and from the move in the opposite direction which follows by a Breakaway Gap." So, that's Wyckoff, Morris, and E&M, all describing the same underlying price behavior in different terms.
H
... UGH, DAMN file...