Introduction:
Analyzing the relative size of consecutive candle ranges reveals changes in market momentum and strength. Expanding or contracting ranges provide clues about the market's energy and potential direction.
What Can Be Learned:
- How expanding ranges suggest increasing strength in the current trend, with more participation.
- How contracting ranges signal reduced momentum, often a precursor to breakouts or trend exhaustion.
- Patterns such as diminishing ranges before a breakout or expanding ranges during a strong trend.
Outcome:
You will enhance your ability to spot trend continuations, reversals, or breakout setups by interpreting shifts in candle range dynamics.