Forex trading can be broken down into three phases: the accumulation phase, the mark-up phase, and the distribution phase. During the accumulation phase, smart money is buying or selling currency pairs, while retail traders are often on the sidelines. In the mark-up phase, the currency pair moves in the direction of the smart money's position, and traders can enter positions. During the distribution phase, the smart money starts to take profits and exit positions, while retail traders may still be entering positions, which can lead to a reversal. Understanding these phases can help traders identify potential trading opportunities and manage risk.
