Introduction
The End Disguised As Continuation
Every trader watches price.
Every strong uptrend ends the same way it began,
quietly.
While retail traders chase continuation,
Smart Money prepares their exit.
📍 The Distribution Phase is where institutions offload positions
into retail euphoria.
It’s not weakness,
it’s completion.
What Is The Distribution Phase?
The Definition:
📊 The Distribution Phase is the period where Smart Money begins to close long positions,
creating a range at the top of a move before reversal.
Price consolidates again,
but this time, supply quietly outweighs demand.
💬 In simple terms:
Accumulation builds longs.
Distribution releases them.
📍 It’s where liquidity changes hands one final time before direction shifts.
Why The Distribution Phase Matters
Recognising distribution early protects traders from chasing exhaustion.
It matters because it:
- Signals the end of institutional expansion.
- Marks the beginning of a liquidity reversal.
- Creates new equal highs for engineered sweeps.
- Offers short setups aligned with Smart Money exits.
💡 What looks like “bullish continuation”
is often just controlled distribution.
How To Trade The Distribution Phase
1️⃣ Identify range formation following expansion.
2️⃣ Mark equal highs: They are engineered for liquidity.
3️⃣ Wait for sweep of the range high (buy-side liquidity).
4️⃣ Enter on structure shift (BOS/CHoCH) confirming reversal.
5️⃣ Journal distribution timing and expansion to reversal ratio.
📍 Smart Money exits when emotion enters.
Example
London To New York Transition
After London expansion, price stalls in New York.
Equal highs form at the top.
News release spikes price slightly higher. Liquidity has been taken.
Moments later, displacement begins downward,
breaking structure and confirming distribution.
💬 The same Smart Money who engineered the rise
now funds the fall.
The Do Nots
Common Mistakes Traders Make
❌ Chasing continuation inside a topping range.
❌ Ignoring equal highs as engineered liquidity.
❌ Misreading distribution as new accumulation.
❌ Failing to record reversal timing across sessions.
💬 Smart traders don’t guess where tops form,
they read when control shifts.
Final Thoughts
The Distribution Phase is Smart Money’s final move.
The exit before the illusion collapses.
It’s where patience turns to profit,
and greed becomes liquidity.
To trade it well is to see what others celebrate,
and quietly step away before the collapse.