During the clear forex uptrend, development of price will not change unless smart money begin with distribution. Market may experience tests, reactions and stakeouts if some trading groups will still consider higher prices to be possible.
Trend reversal will not occur unless smart money abandon their long positions by massive selling (distribution). They will sell to the crowd wishing to buy into what seems to be a raging uptrend. Smart money abandoning their positions are manifested on narrow candles with exceptionally high volume.
End of the bullish market in EURUSD. Orange: Distribution zone. Following trend reversal - downtrend
Uninformed traders are often time misled by their emotions, showing most interest for uptrend just at its peak. Feeling pain of missed opportunity, they are buying, while smart money are busy selling into their demand.
Uptrend rises slowly and steadily, until it reaches the price where it becomes attractive for common trend follower. Crowd will flock into what seems to be a good buying opportunity. This will create an opportunity to begin the distribution -selling, without increasing the price If they started selling without crowd buying involvement, part of their positions would be liquidated at much worse price. Massive selling without sufficient buying would flood the market with supply that would immediately decrease the price.
This process, known as distribution at the top of the uptrend is often accompanied by buying klimax.
Buying klimax is a slow distribution with sudden swings up and down within range. Range (trading belt) is supported by professionals.
Volume (volumes forex indicator) can be high or low. High volume signalises selling filling all demand at beginning of distribution. Low volume signalises no demand and occurs at the end of distribution.
