There is a lot to like here:
- Price tightly consolidating just below prior highs over the last 10 days or so;
- There has been a rally off the August lows which is creating a pattern of higher highs and higher lows;
- This will, in time, lead to a contraction in the volatility factor indicator;
- The 2ATR measurement has now dropped to the pre-August slump levels - in my case, this directly affects position size.
"If there is a sudden expansion in a market that has been trading narrowly, human nature is to try and fade that price move. When you get a range expansion, the market is sending you a very loud, clear signal that the market is getting ready to move in the direction of the expansion" - Paul Tudor Jones
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