What are Coiling Charts?
In this section we are going to look at Coiling charts, they may be Stocks and Shares or some of the major currency pairs too if we think they are worth a look.
Coiling charts are really quite interesting to look at, they show that price has become range bound and is tightening up. I have studied this pattern and there is a strategy that this fits in perfectly with my simple, laid back approach to trading.
As the price of a stock or currency pair tightens over months, weeks or days we can think of this as a spring being coiled up tighter and tighter, there is a real energy building here and as the spring gets tighter and tighter as the range gets narrower and narrower, eventually the energy in the coiled spring will be released and the price will break higher or lower.
Below is a good example of a coiling share price that formed recently. Followed by the subsequent break out which in this case was a continuation of the previous up-trend before the coiling pattern began.