Range expansions signal start of new move | stockbee


Range expansions signal start of new move

At the beginning of a up move there is range expansion. Range expansion is a structural phenomenon. That is how the market behaves.

Periods of range contraction are followed by range expansion during up moves. To anticipate a breakout focus on range contraction periods.

Stocks exhibit several range expansions during trends. Trends are never completely linear. Let us say a stock makes 100% move in 100 day, it does not make that move in increments of 1%. It makes it in series of impulse moves.

In reality the 100% move might just happen in 15 to 20 days out of the 100 days. As traders observed this phenomenon , they developed methods to exploit this market tendency.

By trial and error they refined several methods based on range expansion or range contraction. The evolution was craft based. Now with easy availability of computing power the same methods have moved to computers.

Bots can quickly discover range expansion or create thousands of orders on stocks with range contraction in anticipation of range breakouts. So you will see a range expansion quickly attracts buyers.

In order to make range expansion or range contraction based trading work for you, you have to move from the concept to trading methods. Fortunately there are literary thousands of range based methods. 95% of swing trading methods are based on range expansion or contraction.

If you study them , you will not be reinventing the wheels.

The Stockbee momentum burst swing trading setup is based on range expansion. While the Stockbee anticipation swing trading setup is based on range contraction.

If you want to swing trade develop setups around the range contraction and expansion concept. 

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