What the lesson covers

1. 0:00A pennant is a flag that argues with itself. The range narrows until there is nothing left to narrow.
2. 0:06The shape. Lower highs and higher lows after a steep run. Two converging lines, a range that halves every few bars, and volume falling away to almost nothing into the point.
3. 0:17Why it forms. One side sells every rally a little earlier, the other buys every dip a little earlier. The triangle is that argument running out of room to have.
4. 0:27The levels that matter. The pole sets the scale. The two lines set the boundaries. The last higher low is the price at which the drawing stops being true.
5. 0:37Where it completes. It completes on a close above the upper line, and that line drops every bar, so the level has to be re-read rather than remembered. Volume should return with the break.
6. 0:48How often it follows through. Sixty-one to sixty-seven per cent followed through. Short, steep pennants sit at the top of that; long drifting ones sit under it.
7. 0:57The same shape failing. Here the break clears the line and dies. No volume arrives, price cannot hold above it, and the contraction resolves through the higher lows instead.
8. 1:08The tells. A triangle outlasting its own pole, price two-thirds of the way to the apex, or a break on the same thin volume it contracted on.
9. 1:18The squeeze is the signal. The direction comes from the pole.