Yes it can be difficult, no doubt about it. In a nutshell, any...

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    Yes it can be difficult, no doubt about it.

    In a nutshell, any professionals who are distributing a position, will not be telling the market anything of the sort.
    They will actually be actively spruiking the virtue's of the stock to anyone who will listen, in particular all forms of media (as they need to fill space every day, and will often use anything they can get their hands on). This is done to create the demand necessary to sell into.
    Remember anyone selling a large position will not want anyone else to know what they are doing, so they hide their tracks as best they can.

    So back to the question, Yes it is often difficult to pick a distribution event, at least until it is over and a confirmed breakdown bar appears.
    Generally you will see some sort of supply event to begin with, followed by upwaves of buying which do not follow through as expected (price repeatedly moves higher with ease and appears strong, but then reverses unexpectedly but does not actually breakdown - the story the chart is telling begins to 'not make sense'). Then at the end of the supply event, narrow spread upbars on low volume which fail to follow through start to appear - this is mostly buyers who still believe the hype which has been spruiked recently still buying stock, however the professionals are no longer supporting the price (they are possibly now setting short positions), so the bars appear as 'no demand' bars. The breakdown bar is usually not far away at this point (and then the bad or unfavourable news will soon follow.....).

    And an accumulation is almost the exact mirror image opposite, usually it will start with some sort of buying event (sometimes very large, sometimes much smaller), then repeated weak bars and down waves which no longer fail to breakdown any further, then many testing bars and mini shakeouts (sometimes over two bars), until the breakout bar arrives, and away it goes........

    hope that helps, if you want me to go into even more detail, let me know.

    cheers
    Last edited by Jako8557: 27/05/16
 
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