here's a a few paragraphs from the beginning, this is basic crap but I also think it's important to distill things down to their simplest form as well. also a few images showing some trade examples. don't worry I have plenty of non ideal situations where the stock didn't have big moves where you could raise stops 6 or 10 times but petered out and you were stopped out right away. the paragraphs don't go into detail on the trade setups, simply talks about the market behavior in general  - clearly I go into the 'meat and potatoes' after the initial theory discussions

Markets ebb and flow, consolidate and trend:

If you want to distill down the price action of the market or and individual stock into its simplest form, quite simply at any one time the market is either in a consolidation phase or a trending phase, relative of course to the time frame you are monitoring. That information is so elementary, therefore how is that even useful knowledge? When traders and market technicians are looking for objective trade setups, most of the time they are looking for these periods of consolidation, which manifest into a variety of geometric-like patterns that repeat. Remember that periods of consolidation/contraction are followed by periods of expansion.  

Therefore, many times one of the goals for at trader is to look for these patterns and then acquire a position at or near the end of one of these consolidation patterns/phases so that they can profit from the logical expansion phase.  An analogy one could use would be that of a sprinter who runs a race at full speed (Trend) but then needs to rest (consolidation) in order to regain the energy needed for the next all-out-sprint or Trend. The market and individual stocks behave in the exact same way; a stock will have a big run up, followed by a period of sideways and/or down movement that is very choppy where individual moves (waves) overlap each other.  This sideways consolidation/chop is what builds the energy for the next strong trend, and typically the longer the consolidation, the stronger the resulting trend move will be from that consolidation.  In fact, one of the well-known stock patterns is named with this in mind, it is called the coil or ‘coiled spring’ analogous to the energy that is pent up in the coil and then suddenly released to produce the strong trend move. Coil patterns for example are well known for their ability to produce explosive / strong moves.Just like a coil in your car where its purpose is to store energy for a sudden release of that energy, the same is true for the coil pattern.

Most of you who are not completely brand new to technical analysis know about these standard or well-known geometrical stock patterns from the myriad of books out there on technical analysis that have been identified over the last 100 years, such as coils and triangles, bull flags, pennants, cup and handles, head and shoulders, clean trendline breaks etc.  All these patterns occur during periods of consolidation. Clearly there are momentum traders who chase a stock that is in a pure momentum uptrend (not a consolidation), however for the most part most technical traders are looking for these high probability geometric patterns that occur during a consolidation phase.

Refer to the chart of TSLA below for a beautiful example of this repeating cycle of trend, consolidation, trend, consolidation.  As far as high probability consolidation patterns, the chart shows two of them. The first consolidation was broken by a clean breakaway gap on expanding volume, which started the trending move in August.  Once that trend move ended in late August, it was followed by a 2 ½ month long consolidation that resulted in a coil / symmetrical triangle pattern that once broken lead to a huge up trending move. This chart contains a lot of other useful information that I’ll be discussing in future details later one.