What is distribution & how does it work?

Simply Put, Distribution means Big Players are selling the stock after a large rise without moving the prices too much. According to Wyckoff, Composite Man or Smart Money traders are buying in Accumulation Phase and selling in Distribution Phase. As a small-scale trader you should follow the footprints of Composite Man by doing the same.

What is a distribution indicator in stock trading?

The accumulation/distribution indicator (A/D) is a cumulative indicator that uses volume and price to assess whether a stock is being accumulated or distributed. Is Distribution Stock the Same as a Dividend?

What is a pattern in trading?

Patterns are the distinctive formations created by the movements of security prices on a chart and are the foundation of technical analysis. A pattern is identified by a line connecting common price points, such as closing prices or highs or lows, during a specific period.

How does a distribution affect a stock price?

The price falls because the distribution is withdrawn from the fund’s assets, which decreases the net asset value (NAV). With securities like stocks or bonds, a distribution is a payment of interest, principal, or dividend by the issuer of the security to the shareholders or bondholders.