What happens during the accumulation phase of a stock market?

The price moves during the accumulation phase are slow. The accumulation phase often falls into the end of a downtrend where ordinary investors believe that more bearishness is likely and the overall outlook is pessimistic. For the smart money, however, it can be a good point to enter such a market when the price is at a low.

How do markets work?

Markets move in four phases; understanding how each phase works and how to benefit is the difference between floundering and flourishing. In the accumulation phase, the market has bottomed, and early adopters and contrarians see an opportunity to jump in and scoop up discounts.

What is an accumulation area on a price chart?

On a price chart, the accumulation area is characterized by sideways price movement on above-average volume. Identifying this area could help investors spot good entry points into an investment before its price begins to rise. Accumulation zones can be contrasted with distribution zones, where assets begin to be sold.

How do you recognize market cycles?

An understanding of how markets work and a good grasp of technical analysis can help you recognize market cycles. Markets move in four phases; understanding how each phase works and how to benefit is the difference between floundering and flourishing.