The Weis Wave indicator is rooted in the work of David Weis, a technician who combined Wyckoff analysis with modern charting. Weis observed that price moves in rhythmic waves and that the volume accumulated during those waves reveals the intentions of large traders. He used these volume waves to spot when smart money is actively participating or stepping back, following the Wyckoff principle that volume validates price movement.
Examples of how to use it
[ Trend confirmation ]
Rising volume on successive waves in the direction of the trend confirms strong participation and supports trend following decisions.
[ Momentum exhaustion ]
If volume consistently declines on each new wave, it may signal weakening momentum and a potential reversal.
[ Divergence ]
When price makes a more extreme movement high or low but the corresponding volume wave is lower than the previous wave, it can indicate underlying weakness.
[ Absorption]
When price makes a small movement high or low but the corresponding volume wave is higher than the previous wave, it can indicate absorption followed by reversion.
