medium · Volume Price Analysis
According to the Law of Cause and Effect, how does the duration of a consolidation phase relate to the subsequent trend?
- The duration of the trend is always exactly three times the duration of the consolidation phase.
- A longer consolidation phase results in a weaker breakout as the market has lost its momentum.
- Breakouts from short consolidation periods are more reliable because they capture fresh momentum.
- The magnitude and duration of the resulting trend are proportional to the intensity and length of the preparatory phase.
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