Definition
Distribution is a campaign after an advance in which professional interests sell into public demand across a trading range. Buying climaxes, upthrusts, and no-demand rallies often appear before markdown.
Market psychology
Optimism remains high while stronger holders progressively release inventory and support is eventually withdrawn.
Recognition rules
- A meaningful uptrend precedes the range
- Supply repeatedly appears on rallies
- Breakouts fail or demand weakens
- Support eventually gives way with weakness
Common mistakes
- Calling every sideways range distribution
- Ignoring reaccumulation evidence
Teaching example
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Read a text alternative
The high-volume breakout does not hold. Exceptional effort produces rejection rather than continued progress, and subsequent lower closes confirm distributional weakness.
- Market phase
- Distribution
- Pattern
- Upthrust
- Timeframe
- H4
What commonly precedes distribution?
Distribution transfers inventory after markup has created public demand.