Forex48_TradingAcademy

Accumulation, Manipulation, Distribution

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OANDA:EURUSD   Euro / U.S. Dollar
"Everything starts with consolidation": IPDA (Interbank Price Delivery Algorithms) keeps the price within a range. This allows liquidity to accumulate above the consolidation range in the form of buy orders and below the consolidation range in the form of sell orders. This phase is known as the accumulation phase. Subsequently, IPDA reprices above the consolidation range, triggering buy orders into active market orders. This is known as the manipulation phase (often referred to as the Judas swing). Smart money will match liquidity from willing buyers (buy orders) with short positions and offload these positions to willing sellers below the consolidation range (sell orders). This is known as the distribution phase.
This entire process is part of IPDA's market efficiency paradigm logic, where smart money will sell to buyers and buy back from sellers (and vice versa). This is, of course, oversimplified, and there are ways to determine when and where this process is likely to occur. The speed of the manipulation phase also induces FOMO (fear of missing out) for buyers who are chasing the market, thereby entering long positions in the higher expansion phase. This is another example of how IPDA engineers liquidity through price manipulation. The same concept can be observed with other retail patterns such as trendlines, support and resistance, head and shoulder patterns, bull and bear flags, etc. Each of these patterns is designed to attract retail money into the market. When trading, one should consider "Where are the retail stops?" during their trade analysis. Future updates to this educational section will follow.

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