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The teaching

A broadening formation is higher highs and lower lows. Price expands, takes stops on both sides, and chops up emotional traders. Think of two people fighting over a steering wheel — the seatbelt is your rules, your position size, and your patience.

Draw them top-down: yearly, then quarterly, then monthly, then weekly. Three bars show the expansion. Extend a line from the top of the 3-bar to the highest point, and from the bottom of the 3-bar to the lowest point, left to right — you are boxing price in.

Yearly outranks quarterly, so delete the clutter and keep the higher timeframe's lines. Price respects those lines: it runs to them, rejects off them, and bounces off them. Those touches are your areas of interest for entries and targets. The example in the original lesson is JNJ on the 3-month chart.

Key points

• Broadening = higher highs + lower lows, stops taken both sides.
• Draw top-down: yearly → quarterly → monthly → weekly.
• Yearly outranks quarterly — delete clutter, keep the higher lines.
• Price runs to, rejects, and bounces off the box lines.

Chart & diagram