A T-wave might describe a pattern where the price movement forms a "T" shape on the chart, which could involve:
Strong Vertical Movement (The Stem of the T):
This could represent a sharp, decisive move in one direction (up or down), often occurring in a single candle or a few candles. This movement could be seen as the "stem" of the T. For example, a sudden spike up in price followed by a horizontal consolidation. Horizontal Movement (The Cross of the T):
Following the sharp move, the price might consolidate sideways, forming a horizontal base or resistance/support level, which creates the top cross of the "T." This could indicate a pause or a consolidation phase after a significant move, where the price moves within a narrow range. Contexts Where a T-Wave Pattern Might Be Useful: Breakout Scenarios: If a T-wave forms after a significant upward or downward movement, it could suggest a potential continuation in the direction of the initial move, especially if the price breaks out of the consolidation range.
Reversal Signals: Alternatively, the T-wave could act as a reversal pattern if the price fails to continue in the direction of the initial move and instead breaks out in the opposite direction.
T-Wave Logic Example: Stem (Vertical Movement): Identify a candle or series of candles with a significant price move (e.g., a large-bodied candle with a relatively small wick). This shows momentum in one direction. Cross (Horizontal Movement): Following the vertical move, identify a consolidation phase where the price moves sideways in a relatively tight range. This could be visualized as a series of small candles with overlapping highs and lows.