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| Negative feedback generates many of the classic chart patterns popularized in recent years. The Head and Shoulders, Triangle and Wedge formations all reflect the discordant swings within a rangebound market. Traders must recognize range conditions early and shift to swing-based strategies if they choose to remain in the game. This requires selling strength and buying weakness at the extremes of the congestion. More importantly, the interface between negative feedback and positive feedback marks the location of the trader's most profitable entries. |
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