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What is Consolidation in the Markets | Day Trading - YouTube
Channel: The Trader Chick
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I'm marina the trader chickaletta photo
in today's lesson i'm going to go over
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consolidation areas and transitions
technically they are pretty much the
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same thing we're going to go more into
exactly what they look like the main
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difference with a transition area is it
starts off as a consolidation and turns
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into the transition area because the
market transitions a switches direction
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consolidation areas simply as a slowdown
and the market continues in the same
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direction so here we have a nice strong
movement upward and we have a
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consolidation area a slow down another
thing another way to call consolidation
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areas is sideways movement right so this
is an obvious sideways movement so what
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happens here
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this remains a consolidation because it
continues moving upward
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ok so whenever we have this type of a
movement was in the leg market we don't
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know what's happening in the live market
we're just seeing that it's a slow down
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it's a consolidation right and now we're
waiting
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what's happening here is going to go up
is it go down here in these areas its
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fifty fifty percent it could go either
direction you never want to speculate or
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guess and it continues upward here is a
great example of a strong market up
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right an uptrend and now we're starting
to see that these runs are starting to
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get smaller and smaller and smaller and
smaller and smaller so what's happening
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when that happens we have a
consolidation area right we have an area
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where the market is slowing down
consolidating indecision time traders
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are now fighting with one another the
buyers and the sellers are fighting it
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out there decided yet the market is
going to continue up or the market is
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going to continue down if it continues
that up the buyers went out if it starts
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if it changes direction and goes down
the seller's went out right so
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whenever I see this this is what we're
seeing in the live market right all we
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are noticing is that there is
consolidation area of slow down and all
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we could do is simply read the market
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alright this is a consolidation area it
keeps going keeps going consolidation
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areas have resistance support areas so
here we are and look what happens
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BAM it goes down this consolidation area
turned into a transition area because
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the market transition and now headed
down this can happen throughout trends
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quite a lot because it's kind of like an
excuse me if you think of yourself as
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running a race
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sometimes you just need to slow down and
catch your breath
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that's the same thing with the market
right so here we have a rundown
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it's not a big one but we have a little
consolidation area right again this
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could be a transition area because it
could very well change directions but in
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the overall look it just is a small
consolidation area
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ok then we continue down again and
another consolidation area so now this
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consolidation area actually is a little
bit bigger right because the resistance
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areas a little bit bigger but it's still
a consolidation area right this could
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simply just moved to this area here we
want to encompass all the pivots this is
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a consolidation area and here we go we
continue further down and now we have a
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deeper retracement of deeper pull back
and what happens here we have another
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consolidation area right again it could
very well become a transition area we
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don't know
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all we know is that the market has an
excuse me slowed down and again it's
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just a consolidation area it's not a
large one
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it's just a consolidation area we want
to work with the market as it moves in
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the correct direction in this particular
area the chances are been going up are
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as high as it going down so we always
want to have confirmation and nowhere to
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go
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consolidation areas could be small this
is a tiny little consolidation area this
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is a small consolidation area and
transition areas don't have to be big
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either this is a transition area
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all we know is that is a slow down where
the runs and retracements are much
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smaller and it's either right now called
a consolidation area but now it turns
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into transition area
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that is the only thing really what it is
we don't need to get caught up on the
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words as much as we need to understand
and read the markets I'm arena the
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trader chick via photo and you can check
out more videos on the trader chick .
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com
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