After years of trading, I've seen too many people fall into one trap—completely unable to distinguish between shakeouts and distribution. What's the final result? Either getting trapped or walking away unscathed. The difference often boils down to a few key details.

Last week, I met an old friend who saw his coins drop 30% and was frantic: "Bro, should I add to my position?" I glanced at the candlestick chart and had a sense—this guy was mistaking distribution for a shakeout again. He added funds, and immediately got trapped. I've heard similar stories countless times, always ending the same way.

In this market, if you want to survive, you have to learn this lesson.

**Shakeouts and distribution are not the same at all**

What is a shakeout? It’s when the market maker clears out weak hands to prepare for a rally. Imagine wiping the windshield before driving; they shake the price and suppress it to scare off traders with poor psychological resilience, then gather more chips for the upcoming rise.

Distribution? That’s when they’ve made enough profit and want to offload their high-priced chips to the next buyer. During this phase, retail investors are most vulnerable to being harvested.

I previously tracked the GAMA project, which is a typical example of a shakeout. When it drops, the volume clearly shrinks; during rebounds, volume steadily increases. The key support levels are always firmly held. This is the main force cleaning out floating chips, definitely not a sign of retreat. Conversely, if support levels break easily, be cautious.

**Three signals to see through the dealer’s tricks at a glance**

Over the years, I’ve summarized a few most reliable identification methods:

First, look at trading volume. During a shakeout, volume is sluggish; the more it drops, the fewer traders follow. This indicates the main force is suppressing the price. But distribution is different—you’ll see obvious volume spikes, even hitting new highs in the phase—this is dangerous.

Second, observe support levels. True shakeouts will see key support levels defended; even if it dips, it will be quickly pulled back. During distribution, support levels are like paper—poked, and they break.

Finally, watch the rebound strength. Shakeout rebounds are usually fierce, quickly recapturing lost ground—main force is telling you not to run. Distribution rebounds are weak and sluggish, oscillating at high levels, and then suddenly sliding down without warning.

Learn these three points. When you encounter such situations, you won’t be confused about adding to your position anymore.