Hey Chris,
again, you can give a chart to 5 chartist, and they will seldom say the same thing
You'd think if the same price and volume information is on a chart, you'd only get 2 or 3 interpretations. :)
I think it doesn't even matter if it *isn't* a wedge, because we need to be open to changing our point of view as more bars are drawn on the right side of the page.
Very frequently a consolidation zone will start out its early moments or days looking like a particular pattern, and then over time, will morph into another consolidation pattern.
Practical example - we see this frequently in all time frames on Nasdaq stocks and Nasdaq futures, where it seemed for along time that every stock would end up as a triangular consolidation zone! But these triangles may well have started out their lives as bull or bear flags and other constructs.
Consolidation zones --whatever the name -- are simply periods of indecision. And indecision means that the outcome can vary. So while X pattern in a downtrend might resolve in Y direction, normally, we still have to be en guard for alternative scenarios.
Unless we are flexible in our thought process, we may bury ourselves in the process of sticking to our original appraisal. |
