Relatively simple mechanics underlie the formation of these continuation patterns. The orderly return to a market's mean state sets the foundation for a new thrust in the same direction. An instructive example of this process is found in the current secular bull market. The popular strategy of buying on the dips reflects the core psychology seen with these patterns.

In a series of sharp trend moves, congestion tends to alternate between simple and complex in both time and size. Trade defensively when the prior pattern was both short and simple. Go on the offense after observing an extended battle in the last range.

When examining continuation patterns, the technician must pay close attention to proportionality. This visual element will validate or nullify all other predictive observations: constricted ranges should be proportional in both time and size to the trends that precede them. When they take on dimensions larger than expected from visual examination, odds increase that the observed range actually relates to the next trend larger in scale than the one being viewed. This can trigger devastating trend relativity errors, in which positions are executed based on patterns longer or shorter than the time frame being traded.