Triangles and Consolidation
A triangle describes a narrowing range bounded by converging swing areas. Consolidation is a broader term for a period of limited directional progress. Neither establishes which side will break first.
How it works
Mark boundaries using information available at each observation. A symmetrical triangle has descending highs and ascending lows; other descriptions include relatively flat resistance or support. Choose rules for minimum touches, tolerance and invalidation instead of fitting lines to the eventual breakout.
Worked example
Suppose recent highs decline from 110 to 108 to 106 while lows rise from 100 to 101 to 102. The latest observed range narrows to 102–106. A close at 107 could satisfy a close-above-boundary study rule. If the next close returns to 104, record a failed breakout rather than erasing the original event.
Amounts, prices and scenarios are fictional teaching examples. They exclude any effects not explicitly stated and are not trade recommendations.
Limits and common mistakes
Converging lines depend on scale and pivot selection. Lower volatility can persist longer than expected and news can produce a gap through both a trigger and a stop. A pattern’s name supplies no calibrated success probability.
Knowledge check
Does range compression guarantee a large immediate move?
Read the explanation
No. It describes the past observation window; subsequent movement may remain small, break either way or reverse quickly.
References and further reading
These sources explain the underlying concepts and specifications. They do not endorse QBMFX Academy. Check the relevant market, protocol version and reporting rules before applying an example.