In trading, a consolidation zone is a period of time during which the price of an asset is range-bound and does not show a clear trend in either direction. During this time, the price of the asset tends to oscillate between a specific upper and lower level, often forming a pattern such as a rectangle or a triangle on a price chart.
A consolidation zone typically occurs after a significant price movement, either upward or downward, and indicates that the market is taking a break before deciding on the next direction. Traders often use consolidation zones to identify potential areas of Support and Resistance, as well as to look for breakout opportunities once the price eventually moves out of the range-bound zone.
Status:: #wiki/notes/mature
Plantations:: Technical Analysis
References:: Naked Forex