2 primary concerns
A. Context or framework surrounding the idea
B. Reference points in institutional order flow
Ask yourself, what characteristic are we trading in, then you can build a framework. In consolidation you can say i will not do anything and ill be waiting
Holding pattern: consolidation
Consolidation Expansion Retracement Reversal
All the moves start from consolidation, thats where they build orders
Consolidation → expansion/impulse swing → either back to consolidation or retracement, when retracement happens → another level of expansion or after the expansion it can go to a reversal pattern, after reversal pattern → retracement → consolidation
These 4 conditions interchange trough out Youre only going to get 1 of these conditions You need to know where price is at, where is it likely to go, and where it came from
We always wait for the first expansion
