Concept of "flat" (sideways trend). Broadening and narrowing flats. Concept of "consolidation"
Flat is a specific type of tendency: "flat" or "side" trend ("stub"). When the price fluctuates in more or less stable horizontal (or close to horizontal) channel, this situation is called flat.
"Narrow" and "expansible" flats deserve a particular attention. Progressive narrowing of price channel (consolidation) happens in the case, if price fluctuation decays slowly. As a rule in paradigm of the narrow flat a correction takes place subject to market participants have not agreed yet that general tendency exhausted (it means they do not ready for trend change), but has no strength for further development of prevailing tendency.
Picture 7. Narrowing and widening of flat channelPrev Next