Charles Drummond – PL Accumulation Distribution

P&L Accumulation & Distribution Seminar: Understanding When to Trade

The Art of Trade by Charles Drummond 185 pp. (1993)

Here is an example segment from the “Accumulation/Distribution Seminar.” The Drummond This work uses an envelope:

“Before we go ahead, we have to make clear what “Distribution and Accumulation” What is it and why do we use it?

Distribution This refers to the performance of resistance.

Accumulation It refers to how support works.

If the market is rising, it will encounter geometric resistance. When it hits this resistance, market energy will begin to diffuse and selling will take over. We can monitor the resistance by observing how distribution is done. By observing the price action in relation to the resistance, we can see if the high price of the bar becomes a resistance and, even more important, if enough energy is available to stop the resistance from being reached. The concept is further enhanced by our observation of how this distribution is shaped by the geometric tools provided herein.-Su-Zones, airbag, envelope and pldot.

As you all know ,,,, if the pldot begins to hold on to top, then you have energy to the side. The pldot could be described as distributing. It is resistance and having an effect. Trading is more about knowing when the pldot will be distributed. We believe that it is possible to predict when this will happen by understanding the theory of the envelope. This is complemented by the idea that a shorter time period will show distributions of a longer time period pldot. We do this using the geometric tools provided herein.

Support, or accumulation, is the opposite. More buying will be encouraged than selling. The low of the bar will remain in support and, more importantly to the point, the close will move higher from the bar lows. This is a sign that there is good accumulation quality. Trading is possible when you consider the quality distribution and quality accumulation. It prepares you for action and allows you to recognize when you should trade.

Before we move forward, we need to question why we are using an envelope idea.

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This is because if we know what prices will do with the envelope, we can then get a clear and simple view of how the market should behave.

The envelope concept will reveal the following: Prices move from the bottom of the envelope up to the top. The pldot will force prices out of the envelope if they do. Once prices are outside the envelope, they will stay there until an opposing energy force them inside. This energy is known by us as we can see what patterns do the work. It is predictable and reliable.

Before we begin, let me explain one terminology. It’s the fact that prices leave an envelope when they are released. This is similar to an ocean wave. It is called a ‘seawave’. The charts below will show many text passages that mention the word. ‘seawave’. Seawaves always begin at the beginning of new energy. Prices are the first to exit the envelope.

We will now learn about the envelope concept and how the airbag works.-Su-zones, pldot show what is about to happen to it.”

The reduced price does not include this book.-For traders taking the full course, there is a price package that includes supporting materials. Drummond Geometry.