Famous traders' strategies

Distribution

Defined in 1 lesson · Updated October 17, 2026

Definition

A trading range after a rise in which large holders sell into public demand before a fall.

Example

Suppose a stock rallies from $25 to $50, then swings between $46 and $50 for two months while the news stays upbeat. A spike to $51.20 that closes back at $49.40, an upthrust after distribution (UTAD), and rallies on ever lighter volume both fit distribution. A later close below $46 would suggest large holders have done most of their selling and a decline may be starting.

Hypothetical numbers, for illustration only.

A chart with a shaded demand zone, a small base of candles before a strong rally, and a shaded supply zone above, a base before a strong drop, both extended to the right; price later returns to the demand zone and prints a buy triangle.

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