If you’ve ever wondered how smart money offloads their positions before a major downtrend — this is it. The Wyckoff Distribution Schematic #1 is the mirror opposite of accumulation. It reveals how institutions distribute (sell) to retail before the market collapses.
🔍 Phases Breakdown:
🟠 Phase A – Preliminary Supply & Buying Climax
PSY (Preliminary Supply): First signs of selling pressure.
BC (Buying Climax): Sudden surge in price with high volume – often traps late buyers.
AR (Automatic Reaction): Price drops as buyers lose momentum.
ST (Secondary Test): Retest of the top – often with lower volume.
🔄 CHoCH (Change of Character): Early warning sign that supply is increasing.
🟡 Phase B – Building the Cause
Sideways price action where large players distribute their holdings.
UT (Upthrust): Fake breakout above resistance.
mSOW (Minor Sign of Weakness): Slight breakdowns showing cracks in structure.
🔴 Phase C – The Trap
UTAD (Upthrust After Distribution): Final fakeout to trap bulls before the real drop.
Market often shows strength… right before the collapse.
Another CHoCH confirms the shift toward bearish control.
🔵 Phase D – Breakdown Begins
LPSY (Last Point of Supply): Final bounces with weak demand.
MSOW (Major Sign of Weakness): Strong breakdown on high volume — momentum shifts decisively.
⚫ Phase E – Downtrend
Distribution complete.
Price trends downward with weak rallies.
Retaiя is left holding the bag.
📊 Volume matters: look for volume spikes on upthrusts and breakdowns, and declining volume on bounces.
🔁 Compare with Accumulation:
Accumulation ends in Spring → Uptrend 📈
Distribution ends in UTAD → Downtrend 📉
🔍 Phases Breakdown:
🟠 Phase A – Preliminary Supply & Buying Climax
PSY (Preliminary Supply): First signs of selling pressure.
BC (Buying Climax): Sudden surge in price with high volume – often traps late buyers.
AR (Automatic Reaction): Price drops as buyers lose momentum.
ST (Secondary Test): Retest of the top – often with lower volume.
🔄 CHoCH (Change of Character): Early warning sign that supply is increasing.
🟡 Phase B – Building the Cause
Sideways price action where large players distribute their holdings.
UT (Upthrust): Fake breakout above resistance.
mSOW (Minor Sign of Weakness): Slight breakdowns showing cracks in structure.
🔴 Phase C – The Trap
UTAD (Upthrust After Distribution): Final fakeout to trap bulls before the real drop.
Market often shows strength… right before the collapse.
Another CHoCH confirms the shift toward bearish control.
🔵 Phase D – Breakdown Begins
LPSY (Last Point of Supply): Final bounces with weak demand.
MSOW (Major Sign of Weakness): Strong breakdown on high volume — momentum shifts decisively.
⚫ Phase E – Downtrend
Distribution complete.
Price trends downward with weak rallies.
Retaiя is left holding the bag.
📊 Volume matters: look for volume spikes on upthrusts and breakdowns, and declining volume on bounces.
🔁 Compare with Accumulation:
Accumulation ends in Spring → Uptrend 📈
Distribution ends in UTAD → Downtrend 📉
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.