Accumulation and Distribution Patterns Part 1

Accumulation and Distribution Patterns Part 1

The first chapter of the Accumulation and Distribution Patterns theory

6:40 – 4 TYPES OF SCHEMATICS

1. Accumulation
2. Reaccumulation
3. Distribution
4. Redistribution 

• Accumulation and Distribition are for the very tops and bottoms of moves (Reversal Ranges
• Reaccumulation and Redistribution are continuation schematics that happen in the middle of a trend
• Used to predict which way the range will break before it does, best on HTF

11:45 – ACCUMULATION PATTERNS

• Daniel was able to predict a 50% drop over 6 months using this schematic
• Be open to change you bias, know where you are wrong on your idea and cut your position if necessary
• In the stock market he places a high emphasis on Volume to mark out schematics while in crypto Market Structure is more helpful

21:39 – 5 PHASES ACCUMULATION PATTERNS

1. Phase A
2. Phase B
3. Phase C
4. Phase D
5. Phase E

22:25 - PHASE A:

• PS = Preliminary Support
  • After an extended downtrend this is where buying volume starts to finally show up
• SC = Selling Climax
  • Public starts to panic sells (capitulation) and the sell orders are being absorbed by professional traders at prices of high technical confluence
  • This candle gives us the range low
• AR = Automatic Rally
  • Rally caused by late shorts getting rekt, generally OI decrease or stays level
  • The top of this rally is what gives us the range high

32:02 - PHASE B

• ST = Secondary Test
  • Price retests the low of the SC to test the supply and demand at those prices
  • You do not want to see supply increasing on the retest (OI and new longs opening with increase of volume)
  • Note: ST can happen in Phase A after the AR which doesn’t break the low of the ST, and will occur again in Phase B which normally ends in a SFP or Failed Auction.
  • After the ST you want to see a from of strength, first SOS => break through strong downtrend trendlines.

35:25 – PHASE C

• Spring
  • Daniel his favourite part of the schematic
  • Low volume move below the overall low of the range and then bought up into the range and then bought back up into the range on increased demand => weak hands sell their final bags into the professional traders.
  •  IF we see increased volume and selling interest it is possible that another larger decline can occur.
• Test
  • A move back into the the range with a test of the range low => support found
  • Market Structure changes to bullish with a volume increase 

40:00 – PHASE D

• LPS : Last Point of Supply
  • The last point where there was a major S/R flip
  • Reclaiming this strong horizontal resistance as support is a major bullish factor confirming the low is in
  • Once reclaimed this point should not be lost again.
• SOS: Sign of Strength
  • A move above the range high on increase of OI, Volume and Delta
  • Daniel likes to see a fairly quick move from range low to high => those that sold at the bottom are left on the side-lines
• BU: Back UP
  • The final buying opportunity before range breakout
  • Simple R/S flip
  • Pullback is on a decrease in volume and OI

47:02 PHASE E

• The final phase where the markup occurs
• Very strong moves to the upside => massive gains for the smart traders accumulating during the whole range
• By this time, we are out of all the short trades from range highs/hedges