Stock Market Glossary
Distribution
Phase in which strong hands quietly give up holdings.
In brief: Phase in which strong hands quietly give up holdings.
Meaning in practice
In contrast to accumulation, distribution is often carried out on calm days, while private investors are still enthusiastically buying. High volume without new highs is a classic warning signal.
Context for investors and traders
For traders, this term is most useful when preparing and executing an order. Its meaning depends on the venue, liquidity, time frame and order type. A single reading is not a reliable buy or sell decision.
How to use this in practice
Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.
What to keep in mind
Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.
