Market Cycle Phases
Understanding the four main phases of market cycles and their characteristics.
Phase 1: Accumulation
The accumulation phase occurs when the market has bottomed and institutional investors begin to buy. Prices move within a range, and overall sentiment is still bearish.
Key Characteristics
- • Price consolidation
- • Low trading volume
- • Bearish sentiment
Trading Strategy
- • Look for support levels
- • Monitor volume patterns
- • Start building positions
Phase 2: Markup
During the markup phase, prices begin to rise steadily as more investors recognize the uptrend. This phase typically shows the longest duration and strongest price increases.
Key Characteristics
- • Higher highs and lows
- • Increasing volume
- • Growing optimism
Trading Strategy
- • Buy on pullbacks
- • Trail stop losses
- • Hold core positions