easy · Volume Price Analysis wyckoff-laws
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 resulting trend is always exactly three times the length of the prior consolidation phase.
- A longer consolidation phase generally results in a much weaker breakout because the market has already lost its momentum.
- Breakouts emerging from short, shallow consolidation periods are always more reliable since they capture fresh momentum immediately.
- The magnitude and duration of the resulting trend are proportional to the intensity and length of the preparatory phase.
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