The Bearish Continuation Consolidation Pattern

Let’s have Figure 12 as the example where the bears are clearly in control (Figure 12).

In the consolidation area, the bears and bulls fight against each other by pushing the signal up and down in price.

The wide line is narrowing. This is a sign that the bear is winning this battle.

When the bulls finally can’t maintain to high up the level, it will allow the bears go through the support line. By then, it means that the market next move will be taking by the bearish market.

By understanding this consolidation pattern, a trader can sell his signal immediately just after the bearish line go through the support line. This kind of action can helps trader to minimize his loss.

Many traders are outside there watching the outcome of this battle. As soon as the result is out, a lot of traders will sure sell their stock. That action causes the bearish line break through the support line. That is why Homma said the market is influence by the emotions of traders. By then, more and more traders will keep on sell their trade to minimize their losses.

Those traders who sell their trade before this battle will sure gain more profit to their account.

Figure 12