Consolidation. What is it good for?


Consolidation of price is frustrating! We’d all rather be in a trend making a ton but these periods serve a purpose of course. In the above picture we can see the price hitting a target then consolidating. As the buying and selling goes on in a tight range the moving average lines come closer which allows for crossover and direction change. Consolidation will also occur when the market is in a hold pattern waiting for an announcement, for example the non farm payroll.

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