How to distinguish between accumulation and distribution ranging period?

H

helpme_please

When a security is range-bound, either accumulation or distribution is happening. Knowing which is which helps one place the right trade.

What are some price action and technical characteristics for distinguishing between the two? To me, accumulation and distribution look the same because the price is range-bound. By the time it is obvious to me, it is too late.

I have a track record of losing money due to confusing the two. Perhaps some elitetraders can share their wisdom.
 
Accumulation occurs at the bottom and Distribution at the top. Think about it. A stock has to be bought at the bottom, sold at the top. There are 4 phases in a stock's price movement. Accumulation, Mark Up, Distribution, Mark Down. You buy stock during Accumulation and the Mark Up and sell stock during Distribution and Mark Down. This applies to any ticker or even the indexes. For more details, Google it or watch You Tube videos.
 
smallfil said:
Accumulation occurs at the bottom and Distribution at the top. Think about it. A stock has to be bought at the bottom, sold at the top. There are 4 phases in a stock's price movement. Accumulation, Mark Up, Distribution, Mark Down. You buy stock during Accumulation and the Mark Up and sell stock during Distribution and Mark Down. This applies to any ticker or even the indexes. For more details, Google it or watch You Tube videos.
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Distinguishing between a distribution top or an accumulation after a mark-up is just as difficult. If a trader can distinguish what is top and bottom, he will surely have no problem distinguishing between accumulation and distribution.
 
henry76 said:
You using that hindsight indicator again smally?
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What do you think traders use as a guide in their trading? If following the trends is good for the majority of hedge funds, it is good enough for me!
 
Accumulation tends to be much tighter more controlled range, lower volume, moving average is losing downward slope and starting to flatten out.

Two places you can spot accumulation on a chart

downtrend to uptrend
accumulation is a transition from downtrend to an uptrend. Price loses downward slope and starts to move sideways.the Moving average will start to flatten out and price Will whipsaw between the moving average in a controlled range. eventually it will breakout of its accumulation range move intill an uptrend and finishing its transition phrase.


continuation pattern: after a big run up in an uptrend or big drop in a downtrend, instead of price pulling back price moves sideways in a range. The Moving averages will still be in direction on trend. Price will breakout in direction of prior trend.


Disturbation: very choppy, wild price swings, high volume, moving average is losing upward slope and starting to rollover


Uptrend too downtrend
Disturbation is a transition from uptrend to downtrend as institutional investor sell out there holdings to the public, your see high volume since it is such large blocks of selling and wild swings in price whipsawing aggressive above and below the moving average. Intill it breakouts starting a downtrend.

I use the 30 ema relative to price too determine if it is accumulation or disturbation.
Both are transition periods
On my favourites books to help understand market cycles and trends is Stan Weinstein's Secrets For Profiting in Bull and Bear Markets
 
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