| One lesser-known consequence of the momentum cycle can be observed in the changing range of a series of price bars. As a market rallies or declines, bars tend to expand rapidly into a climax. Then congestion sets in and volatility drops, while bar range contracts along with price rate of change (momentum). Tight congestive bars often signal impending price movement but are frequently overlooked because many math indicators hit neutral "Empty Zones" right at this time. Skilled traders who read small-scale patterns have the advantage here because these narrow range bars capture the eye's attention and permit low-risk entry. |
