medium · Volume Price Analysis wyckoff-laws
A pennant (symmetrical triangle) forms over ten days with price and volume compressing significantly.
Why is this pattern often referred to as a 'coiled spring' in the context of Volume Price Analysis?
- The compression of price and volume represents a buildup of 'cause' that will result in a rapid 'effect'.
- It happens because the candle wicks keep growing longer as the pattern forms, showing clear rejection.
- It's because market makers are simply waiting on a scheduled news catalyst before letting the price jump higher.
- The label only applies if volume actually increases while the triangle pattern is forming.
Sign up free to see the explanation and track your rank →
More Volume Price Analysis wyckoff-laws practice
- What is the confidence level for a short entry?
- Which phase of the Wyckoff cycle follows 'Accumulation' and is confirmed by a high-volume
- What does the volume on the rallies indicate?
- What is the Wyckoff interpretation?
- A trader is analyzing a potential 'Triple Top'. Peak 1: high… — What does this progression
- Why do markets typically fall faster than they rise, and how is this reflected in the VPA
- A stock has declined from 80 to 60. At 60, you see a series… — What is the 'Cause' in this
- If a currency pair consolidates in a 150-pip range for 8 weeks on a daily chart, what is t