Markup Phase

The second phase of the Wyckoff cycle in which price advances from the accumulation base as institutional demand exceeds supply, typically characterized by higher highs, higher lows, and healthy volume on up-bars.

Markup begins when the Composite Operator has accumulated a sufficient position and allows — or actively drives — price above the accumulation trading range. The breakout from the range is the public signal that demand has overcome supply, though by this point institutional buyers already hold their full position. The markup phase is when trend-followers and momentum traders enter, their buying adding fuel to the advance that professional money has already established.

Healthy markup is characterized by specific price-volume relationships: up-bars close near their highs on expanding volume (demand is active), while pullbacks occur on declining volume and close in the upper portion of their range (supply is absent). These pullbacks within markup are "backing up to the edge of the creek" in Wyckoff terminology — normal corrections that offer lower-risk re-entry opportunities for traders who missed the initial breakout.

Markup can last weeks, months, or years depending on the timeframe of the accumulation structure. The depth of the preceding cause (trading range) and the quality of the spring/volume absorption provide clues about the potential magnitude of the markup. Markup ends when distribution begins — when the Composite Operator starts quietly offloading their position into the public demand they helped create.

This definition is for informational and educational purposes only. Nothing on Finance Compass constitutes financial, investment, or trading advice. Always conduct your own research and consult a qualified professional before making financial decisions.