by eric-pal » Fri Aug 18, 2023 10:27 pm
There are 2 general variants:
General 3 push pattern (w/o spike). This is also known as a wedge.
Spike and channel - where 3 pushes after the spike (as shown here).
The general concept is that prices tend to have a bias for only so long. Much of the progression is seen as the directional pressure subsiding over time. The greater the overlap between the "correction areas" the weaker the directional pressure. Note, there is a case where the 3rd leg has an exhaustive push higher, and then prices simply fall off, as can be seen in that particular case.
Review many charts observing how pressure subsides, and you'll see that oftentimes the 3 pattern exists (but not a law).
There are 2 general variants:
General 3 push pattern (w/o spike). This is also known as a wedge.
Spike and channel - where 3 pushes after the spike (as shown here).
The general concept is that prices tend to have a bias for only so long. Much of the progression is seen as the directional pressure subsiding over time. The greater the overlap between the "correction areas" the weaker the directional pressure. Note, there is a case where the 3rd leg has an exhaustive push higher, and then prices simply fall off, as can be seen in that particular case.
Review many charts observing how pressure subsides, and you'll see that oftentimes the 3 pattern exists (but not a law).
