For Business

Trends & Market Structure

What Is Accumulation and Distribution

Accumulation is the flat stretch a market goes through at the bottom after a fall, before it rises; distribution is the flat stretch at the top after a rise, before it falls. This paper shows you the euro's two stretches of 2025 drawn from its turning points, the idea as a stockroom whose shelves are being filled and then emptied, each stretch on the daily chart with the day the price left it, and how to shade a stretch in the background on your platform.

Difficulty
Intermediate
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

This paper is locked

Read it in the browser and keep the PDF with Premium, or buy this one paper.

Buy this paper — $2Get Premium

Two flat stretches

A market that has fallen a long way often goes flat before it rises, and a market that has risen a long way often goes flat before it falls. The first flat stretch is called accumulation and the second distribution. After the euro's fall to 1.01771 on 13 January 2025 the price went sideways for seven weeks, between 1.0177 and 1.0533 — 356 pips, a pip being the fourth decimal place, the smallest step most people count in. After its rise to 1.18295 on 1 July it went sideways for eleven weeks, between 1.139 and 1.192. Same shape, two names, told apart by what came before.

A stockroom

The picture is a stockroom. During accumulation the shelves are being filled, box by box, by buyers who take what sellers offer at the bottom without pushing the price up. During distribution the shelves are being emptied, box by box, by sellers who pass stock to buyers at the top without pushing the price down. From outside, both stretches look the same: a quiet shop and a flat price. The names say what came before the stretch, and which way the boxes are moving.

This paper is locked

Read next