In this video I break down the Broadening Formation—what it is, what it’s telling you about volatility, and how I think about trading it without getting chopped up. A broadening formation is basically expanding range: higher highs and lower lows, wider swings, and a market that’s not “clean.” That’s the whole point—this is usually a sign that participants are disagreeing hard, liquidity is getting pulled, and you can get wicked moves in both directions.
My main takeaway is simple: you don’t treat this like a normal trend setup. I’m looking for structure, where the extremes are, and how price behaves when it tags those edges. If I’m going to trade it, I’m thinking in terms of risk first—where I’m wrong, where the stop makes sense, and whether the tape/Level 2 confirms the move or just looks like noise. If you’re newer, this is one of those patterns where “doing less” can literally save you money—wait for cleaner confirmation or a break with follow-through instead of trying to predict every swing.