#美国加征关税

Stock Price Behavior Analysis Course

Lesson 13: Basics of Consolidation Range (Price Range) Trading

When the price fluctuates up and down within a range without a clear upward or downward trend, we refer to it as a consolidation range. Today we will learn how to identify a consolidation range and how to trade within it.

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1. Identification of Consolidation Range

• The price oscillates repeatedly between clear support and resistance, with highs and lows roughly fixed.

• Trading volume is usually smaller than during trending periods, indicating decreased market participation.

• It reflects a balance of power between buyers and sellers in the market.

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2. Trading Strategies for Consolidation Range

1. Range Trading

• Buy near the support level and sell near the resistance level.

• The risk is a sudden breakout of the price from the range.

2. Wait for Breakout

• Do not trade within the range; wait for the price to break above resistance or below support, then follow the trend.

• Confirm the validity of the breakout with volume and other signals.

3. Beware of False Breakouts

• False breakouts often occur in consolidation ranges; do not blindly chase trades.

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3. Significance of Consolidation Range

• The consolidation period is a phase where bulls or bears gain strength, serving as a prelude to a trend reversal or continuation.

• Learning to trade in the consolidation range can reduce risks and capture stable profits.