Shrinking candle ranges and tighter swings, often forming a triangle or flag. Volatility is contracting.
How traders use it: Compression is watched for a later expansion; traders plan both directions and let the break choose.
Common mistake: Assuming you know which way it will break.
Related: Breakout · Inside bar · Average true range (ATR)
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Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.