Alright let me have another go at this......
I've given this some thought and this seems to be apparent; Markets cycle between congestions (typically volitility is low) and trends (volitility picks up) during which prices oscillate from extreme to exteme sequentially.
During congestion, when little appears to be taking place, a lot is actually happening because some are building positions slowly and quietly in anticipation of the impending trend.
A shakeout happens in order to get even more for even less by clearing the playing field of those orders which were placed beyond the support and resistance areas of the congestion in anticipation of the b/o.
The b/o takes place because those who have been building thier positions during the congestion are now satisfied that the payout from the impending move is worth the associated risk and now begin adding aggressively to thier already sizable position, driving the price in the desired direction. Prices then move dramatically, further fuelled by those previousely uncommitted, jumping in and establishing positions.
The trend has started and more and more get involved which is why trends tend to persist. While all this has taken place the price has been oscillating H/L but when the trend started the price started making higher highs and lower lows etc.
How am I doing?
