How does PA understand market structure? (Market Cycle)

PA believes that the market continuously cycles between trends and ranges. In other words, when prices are not in a trend, they are in a range.

Trends can further be subdivided into strong breakouts and channels, where strong breakouts represent strong trend strength, while channels indicate that the trend is beginning to weaken.

In Figure 2, from left to right, strong breakouts represent strong trends, which turn into narrow channels after a pullback, weaken into wide channels still with a slope, and finally evolve into parallel ranges.

After passing through these four structures in a bullish trend, it reverses into a bearish trend, ultimately entering an infinite loop.