PandL Accumulation Distribution by Charles Drummond

Teacher

Chairman

About Course

P&L Accumulation and Distribution Seminar: Know when to trade;
The Art of Trading by Charles Drummond 185 pp. (1993)

Here is a sample segment from the “Accumulation / Distribution Seminar”. The Drummond envelope is presented in this paper:

“Before we go any further, we need to clarify what“ Distribution and Accumulation ”is and why we use it.

Distribution is related to resistance performance.

Accumulation is related to support performance.

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If the market is going up, you will be involved with geometric resistance. Once you are in this resistance, the energy of the market should start to distribute and start selling, and become stronger than buying. By looking at the quality of distribution, we get closer to the art of monitoring resistance. We do this by looking at how price action reacts away from resistance, looking at whether the price bar high stops at resistance, and even more importantly, if the energy has enough, to force a resistance close. And, we further improved the concept, by looking at the quality of this forced distribution by the geometric tools presented in this document: namely r-su-zones, airbag, envelope and pldot.

For example: As everyone knows, when the pldot starts to stay on top, it has some downside power. You could say that the pldot is being distribute. It is resistance and has some effect. It is knowing when that pldot will be distributed, which gives you the edge in trading. Our thesis is that one can know when to expect this to happen, as we learn about envelope theory. Added to this is the concept that a lower time period will start to show the distribution of a higher time period pldot, and we do this using the geometric tools presented here.

Of course, the opposite of the above occurs in support, through accumulation. The support will generate more purchases than sales, which will result in the bar staying low and, most importantly, the close will move up from the bar lows to show good build quality. When you look at the quality of distribution and the quality of accumulation, you have the art of operating at your fingertips. It prepares you for action, lets you know when not to trade, when support and resistance are breaking.

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Before going any further, we have to ask ourselves why we are using an envelope concept.

The reason for this is that if we can know what to expect as prices deal with the envelope, then we develop a clear and simple description of how the market is supposed to behave.

You will find the following, with the envelope concept: prices will move from the bottom of the envelope to the top of the envelope. If prices are going to come out of the envelope, the pldot will push it. Once out of the envelope, prices will stay out until the opposite energy forces it in, and we observe this energy by knowing which patterns do the job. It is consistent and reliable.

Before I begin, I want to explain a terminology. It is that when prices come out of an envelope, which, like the wave of an ocean, expresses true strength. We call it “sea wave”. In the boxes that follow, there will be many passages of text that mention the word “seawave.” . A sea wave always starts at the start of a new energy, the first time prices come out of the envelope. And warns you not to go against it, unless you observe the high quality of the opposing force.

So now we are going to start learning the concept of the envelope. And how the airbag, r-su-zones, cannot show what is about to happen to it. ”

This book is only included in the reduced price support materials package available to those merchants taking the full Drummond Geometry course.