Step 2: Consolidation, Retest, and the Breakout Boundary

Begin with the Range Model: two setups and two targets. This page gives supporting detail or an entry-method reference within that map. Its method-specific conditions apply when you choose that method.

Step 2 is a coherent consolidation or retest around the active moving-average area after Step 1. The candles need to show a pause or overlap that leaves a defensible boundary.

Mark the boundary before expansion

Draw the upper and lower edges of the structure you are using. The relevant edge in the proposed direction is the selected Step 2 boundary. Freeze it before the breakout instead of moving the line to fit the result.

Overlapping candles may briefly cross the averages and still belong to one readable base. Do not split the same base into several sequences solely because of those crosses.

A base and a run are different observations

Several candles climbing in the same direction without consolidation are not Step 2. A strong move can exist without a qualified 1-2-3 entry at its current location.

Repeated movement across the averages with no coherent boundary is also a reason to wait. The distinction is whether the range can be explained before you know which way price leaves it.

Educational schematic using invented prices, not an actual trade.

Practice the frozen decision

Hide the next candle and mark the proposed base. Write which edge would begin developing Step 3 and what would make the structure unreadable. Then advance replay. A clean later result should not change whether the earlier base qualified.

Continue to Step 3 for the difference between the intrabar boundary break and confirmation after a meaningful close.