Anatomy of Chart Patterns: Consolidations

One of the important aspect of price movements is consolidations. Strong movements give rise to trends, where as the weaker ripples will form ranges (consolidations). The ranges are like a compressed spring, they are just waiting for an opportunity to release and break free. The price oscillates with out a clear trend developing the thrust that leads to next trend. At some point, the thrust reaches stage where it cannot be contained with in the range and break out. Examples are flag, channel, triangle etc