The accumulation, manipulation, distribution market pattern happens everyday in the markets. On October 31 2023 this pattern was visible on the NASDAQ100 index.
Before any move upwards or downwards, the market needs to take out stop losses and manipulate traders to enter buy or sell orders to form liquidity for the market. This market pattern can be seen during the strong trading sessions like the London session and New York session. During the London session, the manipulation followed by the distribution, usually occurs during the 1:30am to 4:30am EST hours and during the New York session 7:30am to 10:30am EST hours. Towards the end of the Asia session is usually seen as the accumulation part of the pattern where the market is setting up levels to form for when the manipulation and distribution phases occurs. This pattern is effective when combining it with divergence indicator/price pattern to decide a clear side to trade.
Below is an example on the NAS100, but don’t just take my word on it, go and look for yourself on past data on a index or forex pair and look at the particular times stated above for the manipulation and distribution phases. If you spot them and learn the market movements then I am sure this pattern will greatly help you on your trading journey.
NASDAQ 100 5 Minute Chart October 31 2023
Sell trade was entered after the break below MSS line (Market Structure Shift) at 14356 with with stop loss at 14381. On October 31 2023 the NAS100 index moved lower to the proposed 1:4 Risk/Reward target (14256) where the trade was closed for +4% gain. (4% gain risking 1% on every trade)
A trader should always have multiple strategies all lined up before entering a trade. Never trade off one simple strategy. When multiple strategies all line up it allows a trader to see a clearer trade setup. If you followed me on social media you too could have caught the NAS100 move lower. We at EWF never say we are always right. No market service provider can forecast markets with 100% accuracy. Only thing we at EWF 100%, is that we are RIGHT more than we are WRONG.
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFX
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