8. Consolidation Patterns—The Sideways Pause
The technical term consolidation has a specific meaning: Consolidation is a sideways pattern of price movement within a limited breadth of trading, in which neither buyers nor sellers are in control. This period of indecision is a third type of trend, in addition to the uptrend and downtrend.
Consolidation trends take up as much time as uptrends and downtrends on many charts. However, with the focus of traders on dynamic price moves, consolidation often is ignored or discounted. A problem for analysts is in finding a clear signal that consolidation is coming to an end. Any valid signal has to be located in the context of an uptrend or a downtrend, so the only way to spot the end of consolidation is ...
Get A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
