Join us June 2 @ 5:30pm EST on Market Pulse Dot Live for...
Consolidation Trading
Please Note: Monday's episode (May 31) will be skipped in observance of Memorial Day here in the United States.
Consolidation Trading
When markets reach an equilibrium of bullish and bearish participants, it will move sideways. This sideways movement is called a consolidation, and it can lead to major profit opportunities. The compression of the market creates a “boiler pot” of trading sentiment. A trading range is established, and many market participants are looking for a break of the pattern. Once the bulls or the bears take over, we often see an explosive move in either direction.
There are many types of consolidations. However, they all include a support and resistance level. This could include flat support and resistance which would constitute a classic trading range. Or it could include a flat resistance level but a rising support level. This classic pattern would be commonly referred to as an Ascending Triangle. The advantage of identifying this type of pattern is that it often provides us with a prediction. For example, our forementioned Ascending Triangle is considered a bullish pattern and we would look to go long once it is broken to the upside.
One of the great proponents of consolidation trading was Nicolas Darvas. He published his approach to trading consolidations in the mid 1900’s in the groundbreaking trading book "How I Made $2,000,000 in the Stock Market". This publication made the “Darvas Box” a cornerstone of trading.
Nirvana Systems automated the analysis technique of creating a Darvas Box. But in typical Nirvana fashion, we took this concept to a new level by modernizing Darvas Box analysis. Our Darvas Box plug-in includes the classic Darvas Box calculation made popular by Nicolas Darvas, but also includes our upgrading of the concept for the current markets. The Darvas Box plug-in includes Trading Strategies that give you classic Darvas Box trades, as well as our take on these concepts that are more conducive to current markets.
Learn More About Nirvana's Darvas Box Plug-in
Technical Analysis Topic: Consolidation Trading
Stocks To Watch with: Nirvana's Darvas Box Plug-in
- Constructing the Darvas Box
- Trading a Breakout of the Box
- Darvas Box Strategies included with the Plug-in
Join us June 2, at 5:30pm EST, we broadcast live from both:
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What is Market Pulse Dot Live (MPL)?
MPL is complementary content about trading the current market with some technical analysis education too.
A typical show covers the following topics:
- Overview of Today's Broad Market
- Summary of Groups on the Move
- Technical Analysis Lesson
- Stocks to Watch
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Nirvana Systems has been creating Trading software since the 1990's. Nirvana was founded on the concept of automated trading, our CEO, Ed Downs, fell in love with the potential profits offered by the markets but quickly realized that emotions were getting in the way of success and it was too difficult to find good candidates. Nirvana Systems has been creating software that automates Trading ever since.
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