Group: Trend Continuation
Definition:
A sideways consolidation after an impulse move, where the market builds energy before the next breakout.
Key Characteristics:
- Horizontal support and resistance
- Price oscillates within the range
- Volume builds before the breakout
How to Trade:
Enter in the direction of the breakout, following the trend. Place the stop-loss beyond the opposite boundary.
Common Mistakes:
- Trading inside the middle of the range
- Ignoring false breakouts
Conclusion:
A simple and reliable formation, highly suitable for algorithmic trading.
