Ciclos de mercado 

Ciclos de mercado 

Market cycles in financial markets refer to recurring price movement trends or patterns over time. 

Let’s examine the four (4) phases of market cycles and how understanding them can improve your Forex trading: 

 

1.      Accumulation

This phase marks the beginning of the market cycle. It occurs after a decline (when the market has bottomed out in the previous cycle) and signals the end of the bearish period or consolidation phase. 

-         Selling pressure decreases, while demand starts to rise. 

-         No new lows are formed, indicating that downward momentum is weakening. 

-         An upward trend gradually begins to emerge. 

 

2.     Markup (Uptrend)

The markup phase, often considered the longest phase of the market cycle, is when the accumulated interest from the first phase transforms into momentum. 

-         Prices begin to rise, reaching new highs. 

-         Investor sentiment becomes optimistic, and demand for the asset strengthens. 

-         More traders join the uptrend, pushing prices further. 

-         In the later stages of this phase, FOMO (Fear of Missing Out) and greed starts to take hold.

The market may become overbought, signaling a potential trend exhaustion. 

 

3.     Distribution

At this stage, the optimism from the markup phase begins to fade as the market nears the cycle’s peak. 

-         Traders have mixed sentiments—some remain bullish, while others grow cautious. 

-         Prices often move sideways (within a trading range), reflecting a balance between buyers and sellers—consolidation. 

-         New highs become rare, and failed attempts to push higher indicate weakening demand. 

-         Selling volume increases as smart money (institutional investors) offload their positions to less experienced retail traders who enter the market due to FOMO. 

-         The distribution phase can be emotionally challenging for many speculators. 

 

4. Markdown (Downtrend)

This is the final phase of the cycle. Market sentiment turns bearish, resulting in a massive sell-off. Prices drop sharply. 

-         Panic selling accelerates the decline. 

-         Eventually, the market reaches a new bottom and forms another accumulation phase. And the entire cycle repeats.