Always chasing high school quilts? Maybe you haven’t understood the rules of the game of smart funds

If you want to understand the operating logic of the market at any moment, you must understand the behavioral motivations of large participants. The three stages of the market – accumulation, manipulation and distribution – constitute the core path of “smart capital” trading behavior. This analysis method originated from Richard Wikoff
Wyckoff) theory emphasizes that the cyclical nature of the market is driven by institutional behavior.

However, classic Wickov’s interpretation of accumulation and distribution is slightly different. For some traders, identification and application are still challenging. In recent years, with the prevalence of market structure trading, AMD Trading Method (or ICT)
The Law of the Three Forces) has gradually become an easier choice to practice.

What is AMD Trading Method?

AMD(Accumulation, Manipulation, Distribution) Trading Method, by Trader Michael J. Huddleston
Promotion is a simplified and practical version of Wyckoff’s theory. This method is widely applicable to high-liquid markets such as foreign exchange, index, and cryptocurrency. The core lies in identifying three major stages of large-scale fund management positions:

Accumulation stage: quietly building positions in a specific price range;

Manipulation stage: induce retail investors to stop losses or chase orders, and guide the market to misconceptions;

Distribution stage: The direction is reversed, institutions cash in profits, and prices move significantly in a favorable direction.

This process is often accompanied by systematic manipulation of retail investors’ emotions: not only lie to you to enter the market, but also to stop loss. Understanding the structural logic behind these three stages is the key to identifying trading traps and formulating high winning strategy.

Accumulation stage

This stage is usually manifested as consolidation, and prices fluctuate repeatedly within a narrow range. Retail investors often try to short at the top of the range, try to long at the bottom, and set stop loss outside the range. At this time, the trading volume is sluggish and the volatility converges, which makes people misjudged as lack of opportunities.

But it was in this silence that “smart funds” began to quietly build positions and lay out for the next big move.

Manipulation phase

When the position is ready, “smart funds” will suddenly increase the volume to push the price, forming a “false breakthrough” market. Retail investors were swept to stop losses and wrongly chased orders, and the market fell into chaos.

This is a psychological war. Retail investors make emotional decisions in a short period of time, either being swept away by losing money or having a reversal of position direction, and falling into a deeper trap.

Distribution stage

In the final stage, the price moves violently in reverse and trading volume surges. Institutions take advantage of the situation to distribute positions, and prices will move in a favorable direction.