Accumulation & Distribution
Wyckoff's schematics map out exactly how institutions build and unload massive positions — right in front of everyone.
The Logic
Big players can't enter or exit all at once. They need time to:
- Accumulate (buy quietly at the bottom)
- Mark up the price
- Distribute (sell quietly at the top)
- Mark down the price
This creates predictable patterns.
Accumulation Schematic
Accumulation happens at the bottom of a downtrend. Smart money absorbs all the selling.
Key Phases
Phase A — Stopping the Downtrend
- PS (Preliminary Support): First signs of buying interest
- SC (Selling Climax): Panic selling, high volume — smart money absorbs it all
- AR (Automatic Rally): Sharp bounce as selling pressure exhausts
- ST (Secondary Test): Price retests the SC area on lower volume
Phase B — Building the Cause
- Extended consolidation between SC and AR boundaries
- Volume tests, shakeouts, and range-bound action
- Smart money quietly accumulates while retail is confused
Phase C — The Spring
- Price briefly breaks below the SC low (support)
- Stops get hunted, weak hands exit
- Then price snaps back into the range — the trap
- This is the highest-probability entry
Phase D — Markup Begins
- SOS (Sign of Strength): Strong rally with volume breaking above resistance
- BU/LPS (Back-Up / Last Point of Support): Successful retest of former resistance as new support
Phase E — Full Markup
- Price trends strongly upward out of the range
Distribution Schematic
Distribution is the mirror image — it happens at the top.
Key Phases
- PSY (Preliminary Supply): First signs of selling at the top
- BC (Buying Climax): Euphoric buying, smart money sells into it
- AR (Automatic Reaction): Quick drop after the climax
- UTAD (Upthrust After Distribution): False breakout above resistance — the trap
- SOW (Sign of Weakness): Break below support with increased volume
- LPSY (Last Point of Supply): Failed rally before markdown
Accumulation vs Distribution
| Feature | Accumulation | Distribution | |---------|-------------|--------------| | Location | Market bottom | Market top | | Trap | Spring (false breakdown) | UTAD (false breakout) | | Volume signal | High volume on SC/Spring | High volume on BC/UTAD | | Exit | Markup (bullish) | Markdown (bearish) |
How to Trade
- Identify the range after a significant trend
- Watch for the Spring (accumulation) or UTAD (distribution)
- Enter after the trap reverses with volume confirmation
- Stop loss below the Spring/above the UTAD
- Target: the opposite end of the range, then trend continuation
Key Takeaway
Accumulation and distribution are the market's "loading zones." Learn to spot them and you'll trade alongside smart money, not against it.