easy · Volume Price Analysis wyckoff-laws
The 'Law of Cause and Effect' is used to estimate target duration and magnitude.
If a currency pair consolidates in a 150-pip range for 8 weeks on a daily chart, what is the 'Heuristic' expectation for the breakout move?
- A brief stop-hunt move that snaps to the range midpoint within three days.
- The market enters markup regardless of any volume validation on the breakout bar.
- A violent 300-pip breakout that must fully conclude within just the next 48 hours of trading.
- A move of at least 150 pips lasting for a duration proportional to the 8-week cause.
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