#培训

Consolidation, also known as ranging market, refers to a situation where neither the bulls nor the bears can determine a clear victory. At this stage, the forces of both sides are roughly balanced, the market lacks a definite directional movement, and the price chart is confined between support and resistance levels.

Any consolidation phase will not last indefinitely. Sooner or later, a decisive outcome will be reached, which can be confirmed by observing a price breakout beyond a boundary. These breakout points often serve as good entry signals.

Formation stages of a consolidation pattern (taking the end of an uptrend as an example):

- During an upward trend, the price will continuously make new highs and new lows;
- When a new high is formed and the price retraces to establish a temporary low, the price will fail to break through the previous high again. The new high will be roughly at the same level as the previous high. At this point, a horizontal channel can be drawn, which requires at least three points: two highs and one low, or two lows and one high;
- During the consolidation, the price will repeatedly encounter resistance or support at the channel boundaries. Traders can utilize these boundary rebound signals for trading. Market makers gradually accumulate positions during this period, which can last for some time;
- Ultimately, the bulls and bears will reach a conclusion, and when the price breaks through one boundary, a new trend will be established.