Accumulation
Read the drawing left to right.
- SC, selling climax. Bar 4. Widest down spread, largest volume, close off the low. Part 4.
- AR, automatic rally. Bar 5. The bounce that follows when selling exhausts. Its high marks the top of the range that will now build.
- The range. Bars 6 to 12. Spreads narrow, volume falls toward the average and below. This is the cause building. The longer it lasts, the more effect it supports.
- Spring. Bar 13. A push below the range low on heavy volume that closes back up. The shakeout from part 4, now at its address. It takes the stops under the range and hands the supply to whoever has been accumulating.
- Reclaim. Bar 14. Price back above the range low. The spring worked.
- LPS, last point of support. Bar 16. The test from part 5: a dip on the lowest volume of the sequence that finds no sellers. This is the entry area.
- SOS, sign of strength. Bars 17 to 21. Up bars widen and close high on rising volume, and the range high is cleared. The markup has begun.
Distribution
Now the mirror.
- BC, buying climax. Bar 4. Widest up spread, largest volume, close off the high. Part 6.
- AR, automatic reaction. Bar 5. The drop when demand exhausts. Its low is the bottom of the range.
- The range. Bars 6 to 12. Volume dries up on the rallies. Watch for no demand bars here; they are the early warning.
- UT, upthrust. Bar 13. The push above the range high on heavy volume that closes back inside. Breakout buyers are filled and trapped.
- Fail. Bar 14. Price back below the range high.
- LPSY, last point of supply. Bar 16. A rally on the lowest volume in the sequence. No demand at its address. This is where the short is built.
- SOW, sign of weakness. Bars 17 to 21. Down bars widen and close low on rising volume, and the range low breaks. Markdown.
Why the drawing is symmetrical and the market is not
The schematics are mirrors. Real gold is not. Accumulations tend to be sharp: a climax, a short range, a spring, and away. Distributions tend to sprawl: a climax, a range that lasts a day or two, a second and sometimes third upthrust, and a break that comes from a no demand rally rather than a dramatic bar. If your distribution reading keeps being early, that is why. Give tops more time and demand more confirmation.
Using the schematic without forcing it
The trap is pattern hunting: deciding the market is in phase B and reading every bar to fit. Use the schematic the other way round. Identify the event you can see with certainty, usually the climax, then ask what the schematic says should come next, and wait to see whether it does. If the range breaks down instead of springing, the accumulation reading was wrong and you lost nothing but patience.
The market structure framework on this site reads the same swings with different names, and the two agree far more often than they disagree. When they disagree, structure usually has it and VSA is early.
Course navigation. Previous: Part 7, Spread and close. Course index: VSA course for gold. Next: Part 9, VSA on spot gold.
FAQ
How long does accumulation take on gold?
On H1, anywhere from a session to several days. Very short ranges after a climax usually fail to hold; the cause was too small. The most reliable accumulations on gold have at least one spring or one clear low volume test before the breakout.
Is the spring necessary?
No. Many accumulations break out directly from a low volume test without ever undercutting the range low. The spring is the best entry when it appears because the stop is tight and the stops under the range have already been taken, but its absence does not invalidate the structure.
What is the difference between LPS and a no supply bar?
Same bar, different address. A no supply bar can appear anywhere in an uptrend. The LPS is the specific no supply test that happens inside the accumulation range, after the spring, just before the sign of strength.
Can I trade the range itself?
You can, but VSA has little to say inside it. The edges are where the events happen; the middle is noise. Range trading on gold is covered separately on this site, and it uses different tools.
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