Wyckoff Distribution and Accumulation



Perhaps the most detailed example of chart pattern is Richard Wyckoff's accumulation and distribution patterns. The bullish version (accumulation) indicates the bottom of a downtrend and a reversal upward — assets are continuously absorbed until demand exceeds supply.

Each pattern has multiple stages and features, so identifying them can be complex. In short, accumulation patterns form in a trading range after a downtrend and fail to break downward.

After the last touch of the lower boundary of the range ("spring effect"), the price sharply rises to the upper boundary of the range or even higher.
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