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P&L Accumulation & Distribution Seminar: Mastering the Timing of Trades
The Art of Trading by Charles Drummond, 185 pages (1993)
Here’s an excerpt from the “Accumulation/Distribution Seminar,” where the Drummond Envelope concept is introduced:
“Before proceeding, it’s essential to clarify what ‘Distribution and Accumulation’ mean and why we use these terms.
Distribution describes the behavior of resistance levels.
Accumulation describes the behavior of support levels.
When the market trends upward, it encounters geometric resistance. Upon reaching this resistance, market energy begins to distribute — meaning selling intensifies and overpowers buying. By carefully analyzing the quality of this distribution, we learn to monitor resistance effectively. This involves observing how price action behaves near resistance, whether price bars stall at resistance highs, and more critically, if there’s enough selling pressure to push the closing price down off the resistance. We deepen this understanding by using geometric tools introduced here, such as r-su-zones, the airbag, envelope, and pldot.
For example: as many know, when the pldot holds near the top, it signals downward energy. You can interpret the pldot as distributing — acting as resistance and influencing price action. Knowing precisely when the pldot will begin to distribute provides a significant trading advantage. Our core idea is that by understanding the envelope theory, traders can anticipate these events. Furthermore, lower time frames reveal distribution signals for pldots on higher time frames, which we detect using the geometric tools presented.
Conversely, accumulation occurs at support levels. Support attracts more buying than selling, causing price lows to hold at support and closing prices to rise above bar lows, indicating strong accumulation. By evaluating both distribution and accumulation quality, traders gain mastery of the art of trading. This prepares you to act decisively, recognize when not to trade, and identify breakdowns in support and resistance.
Before moving forward, let’s consider why we apply the envelope concept.
The key reason is that understanding how prices interact with the envelope gives you a clear and straightforward framework for predicting market behavior.
You’ll find that prices typically oscillate between the bottom and top boundaries of the envelope. When prices break outside, the pldot pushes them. Once beyond the envelope, prices usually remain outside until counteracting forces push them back in, which we can identify through consistent, reliable pattern recognition.
One term to note is ‘seawave,’ which describes the strong momentum when prices first exit the envelope—like an ocean wave’s surge. This seawave signals the start of a new energy wave and warns traders not to trade against it unless there’s clear evidence of strong opposing force.
Now, we will begin exploring the envelope concept and how the airbag, r-su-zones, and pldot reveal upcoming price movements.”
Note: This book is included only as part of the discounted package of supporting materials available to traders enrolled in the full Drummond Geometry course.

