Distribution
A period where large holders are quietly selling into strength — a potential precursor to a downtrend.
Distribution is the Wyckoff phase opposite to accumulation. Smart money sells (distributes) existing positions to retail buyers who are attracted by strong recent price action. Price stalls near highs in a range, with elevated volume on down-days suggesting supply is overwhelming demand.
Telltale signs of distribution:
- Multiple tests of a resistance zone that fail to break cleanly.
- Volume expands on red days and contracts on green days within the range.
- Divergence on momentum oscillators at the highs.
Related Terms
Accumulation
A period where informed buyers are quietly building positions without driving price significantly higher — a potential precursor to an uptrend.
AdvancedDivergence
Price making a new high/low while a momentum indicator fails to confirm — a warning that the current move may be losing steam.
IntermediateResistance
A price level where selling pressure has historically halted or reversed an upward move.
BeginnerReversal
A sustained change in the direction of the prevailing trend, not just a temporary counter-move.
IntermediateVolume Profile
A histogram of traded volume at each price level over a period, revealing where the market has done the most and least business.
Advanced