What is Consolidation in Forex? - What is Price Consolidation in Forex?

Price consolidation in forex is when prices stop moving upwards or downwards in a forex trend & start to move sideways in what is known as a consolidation.

Price will continue to consolidation and move sideways for a period of time until such a time that one side of the market - either the buyers or the sellers gain control of the market and either push prices upward in an upward forex trend or push prices downward in a downwards trend.

Symmetrical Triangles - Consolidation Chart Patterns

Symmetrical triangles are patterns with converging trend lines that form a consolidation period and are used to trade the price consolidation.

Technical buy point from symmetrical triangle is the up-side break of price consolidation, while a down-side break of the price consolidation is a technical sell signal. Ideally, a market breaks-out from a symmetrical triangle prior to reaching apex of the triangle.

When these price consolidation patterns form we say that the forex market is taking a pause before deciding next direction to take.

What is Consolidation in Forex? - What is Price Consolidation in Forex? - What is Consolidation in Forex Trading?

However, this price consolidation pattern can't go on forever & just like in a tug of war one side eventually wins, below are two example of how price consolidation eventually had a breakout and moved in one direction.

Price Breakout Downwards Sell Signal after a Consolidation - What is Consolidation in Forex Trading?

Price Breakout Upwards Buy Signal after a Consolidation - What is Consolidation in Forex Trading?