Accumulation - Distribution - None of the Above

[johnnyg]

Would you say there is a difference between absorbing and buying?

 

[beamstas]

Would you say there is a difference between absorbing and buying?

Do you have Master the Markets? There is a good section on high volume bars with narrow spreads, and also on accumulation and distribution.

Im not saying you are wrong -- i just don't think high volume on any down move is exceptionally bullish.

 

[johnnyg]

I do, about 1/2 way threw it ATM. Ill have to have another read over those sections.

Discussion I find always to be useful.

(I like your blog BTW, keep it up.)

John.

 

[beamstas]

I do, about 1/2 way threw it ATM. Ill have to have another read over those sections.

Discussion I find always to be useful.

(I like your blog BTW, keep it up.)

John.

Johnny - the stuff on accumulation is on page 20 under "market basics"
I don't think it mentions small ranging down bars with high volume so you could be right, i'll have a look through it later see if i can spot anything

brad

 

[tech/a]

Would you say there is a difference between absorbing and buying?

Of course.
Absorption of buyers generally occurs at tops.
Absorption of sellers generally occurs at bottoms.

Once complete one or the other are left to continue unabated.

 

[johnnyg]

From Master the Markets.

The Selling Climax

Brief Definition: An imbalance of supply and demand causing a bear market to transform into a bull
market.

Explanation: This is the exact opposite of a buying climax. The volume will be extremely high on
down-moves, accompanied by narrow spreads, with the price entering fresh low ground.
The only difference is that on the lows, just before the market begins to turn, the price
will be seen to close in the middle or low of the bar.

So, for a legitimate down-move you would need to witness
evidence of selling, which would reveal itself as increased volume on down-bars (i.e. the present bar closes
lower than the previous bar). If you see an increase in volume that is excessive, then you should be wary, as this may indicate that demand is in the background.

 

[johnnyg]

Of course.
Absorption of buyers generally occurs at tops.
Absorption of sellers generally occurs at bottoms.

Once complete one or the other are left to continue unabated.

So do you think we have buyers absorbing (not buying) the selling pressure?

 

[beamstas]

From Master the Markets.

Nice pick up johnny -

The volume will be extremely high on down-moves - Yes
accompanied by narrow spreads - Yes
with the price entering fresh low ground - kinda
The only difference is that on the lows, just before the market begins to turn, the price will be seen to close in the middle or low of the bar. - Yes

So it is saying there is demand?
Not sure if this is accumulation but it's interesting

 

[johnnyg]

Well its not saying so much that's there is demand, but to quote it from the book -

The following events will always occur when markets move from one major trending state to another

I guess when you think about it its pretty simply really.

When you've got tight ranging down bars on high volume there has to be some sort of buying demand/absorbing there, otherwise you'd simply have a wide ranging down bar.

 

[pavilion103]

When what appears to be an area of consolidation begins to form, what are some of the signs to determine whether this is re-accumulation before further rises or distribution and a likely change of trend. Or if it's neither.

What are the keys to look out for?
I'm thinking with distribution there will be sharp increases in volume, with price struggling to rise (effort v result).

 

[tech/a]

Distribution or Accumulation isnt going to be seen in a bar or two.
You will see dumping and you will see strong buying in single bars.

Whether that then equates to Distribution will be seen at resistance levels where sellers flood the market at a price band.
Same will occur at Support levels if its accumulation.
Price will be seen as best value for buying or selling in a range where accumulation or Distribution occurs---we call this consolidation.
Being able to read consolidation (Flat/Rising/Declining) is important for those who trade for the longterm or indeed investors.

There are some very interesting ways of tipping the scales our way developed by some pretty clever guys. Marc Chaikin is just one.

 

[tech/a]

Distribution or Accumulation isnt going to be seen in a bar or two.
You will see dumping and you will see strong buying in single bars.

Whether that then equates to Distribution will be seen at resistance levels where sellers flood the market at a price band.
Same will occur at Support levels if its accumulation.
Price will be seen as best value for buying or selling in a range where accumulation or Distribution occurs---we call this consolidation.
Being able to read consolidation (Flat/Rising/Declining) is important for those who trade for the longterm or indeed investors.

There are some very interesting ways of tipping the scales our way developed by some pretty clever guys. Marc Chaikin is just one.

 

[Garpal Gumnut]

Distribution or Accumulation isnt going to be seen in a bar or two.
You will see dumping and you will see strong buying in single bars.

Whether that then equates to Distribution will be seen at resistance levels where sellers flood the market at a price band.
Same will occur at Support levels if its accumulation.
Price will be seen as best value for buying or selling in a range where accumulation or Distribution occurs---we call this consolidation.
Being able to read consolidation (Flat/Rising/Declining) is important for those who trade for the longterm or indeed investors.

There are some very interesting ways of tipping the scales our way developed by some pretty clever guys. Marc Chaikin is just one.

For those new to charting a view of live charts in different time scales all the way from 1minute to 1 monthly is available for Bitcoin BTC via the link below.

And it is free.

The window can be adjusted to block out the "noise" on the right hand size, and the adjustment for time scale is in the top left hand corner.

With such a rapidly changing and volatile unit such as BTC with large hedge/crypto funds and small traders experiencing alternatively mania some years ago and the depths of depression recently, it is a good example of Distribution and Accumulation.

May I suggest for beginners to work from monthly data back to weekly, then daily and then lower time scales.

If you read the tips from @tech/a and other skilled chartists in the comments above, it may enlighten you in your trading in stocks and other units of exchange which are charted, which you might be investing in or trading.

Compare their advice to the charts on the link.

Bitcoin Price in USD | Real Time Bitcoin Chart | KITCO

The Kitco Bitcoin price index provides the latest Bitcoin price in US Dollars using an average from the world's leading exchanges.

www.kitco.com

gg