Broadening Formations Explained — Measured (PDF Guide)

A megaphone, an expanding triangle, a widening formation - three names for a shape everybody agrees means distribution, exhaustion, a top forming. None of that is in any definition anybody has written down. What is written down is five turning points and two comparisons, and applied honestly it finds the shape roughly once in three hundred bars, which is nothing like how often you have been shown one.

This guide uses the published algorithmic definition - Lo, Mamaysky and Wang, Journal of Finance 2000 - printed as written: five turns, strictly rising maxima and strictly falling minima. Across 35,944 bars that gives 110 broadening tops and 128 broadening bottoms. Then it says exactly what can and cannot be claimed from that. This is a 45-page PDF that teaches Broadening Formations from the first thing you see on the screen through to a written strategy with an entry, a stop and an explicit rule for when the trade is wrong.

Nothing is taught underneath a chart. Every label sits on the candle, the line or the level it is describing, on real BTC, ETH, SOL and LINK charts, with the smoothed curve the detector actually saw drawn over the candles. There are three quizzes on real charts, each followed by the same chart re-shown annotated with the reasoning, plus faded practice pages where the first steps are filled in and you finish the rest.

WHAT'S INSIDE

The rarest published shape in the wave - one bar in 327 for the top. Every other shape with a published rule is commoner, most of them several times over.

It carries no direction either - six of the 19 shapes counted here have no promise written into them. This is one, and every popular reading of it - distribution, exhaustion, a top - is an addition.

Expansion is rarer than contraction, measured - 303 triangles against 238 broadening formations, and the triangles win at every bandwidth in the sweep.

One threshold, and it is the invisible one - no tolerance at all. So everything rests on the smoothing, and the pair count runs 393 to 59. 6.7 times, same bars.

What the shape can honestly be used for - it describes an expansion: each swing larger than the last. That is a real, checkable, dateable observation, and it is not a forecast.

WHAT YOU'LL BE ABLE TO DO

Mark a broadening formation by rule instead of by trendline.

Say why it is the exact mirror of the triangle, and use the pair.

State the one threshold this pattern has, and what moving it costs.

Explain why a shape with no promise cannot be tested for one.

Quote a measured answer to whether expansion or contraction is commoner.

AN HONEST NOTE

A broadening formation is a clue, not a crystal ball. It describes what price has already done. This guide contains no win-rates, no backtest results and no promises about what you will make, because nobody can verify those and you should not trust anyone who prints them. What it hands you instead is a set of rules you can test yourself on TradingView in an afternoon. Educational, not financial advice.

Instant download. 45 pages, PDF.