#培训

Consolidation, also known as sideways trading, refers to a situation where neither the bulls nor the bears can determine a clear winner. At this point, the buying and selling forces are roughly equal, and the market lacks a clear directional movement. Price charts are confined between support and resistance levels.

Any consolidation phase will not last indefinitely. Sooner or later, a decisive move will occur, which can be confirmed by observing a price breakout beyond a boundary. These breakout moments often present good entry points.

Formation stages of consolidation (using an uptrend as an example):

- During an upward trend, prices will continuously make new highs and new lows;

- When a new high is made and followed by a pullback forming a temporary low, and the price fails to break the previous high again, the new high and the previous high are roughly at the same level. At this point, a horizontal channel can be drawn, which requires at least 3 points—two highs and one low, or two lows and one high;

- During consolidation, prices repeatedly face resistance or support at the channel boundaries. Traders can use these boundary bounces as signals for trading. Market makers gradually accumulate positions during this period, which can last for some time;

- Ultimately, the bulls and bears will determine the winner, and the price will break through one boundary, forming a new trend.