A Volatility Contraction Pattern (VCP) is a chart consolidation that tightens from left to right within a price base. It’s essentially a supply and demand characteristic that creates this chart pattern. This pattern provides a clear pivot point to manage risk against strength.
The VCP is created by supply and demand. It’s an effect of accumulation within a base by institutions. A proper VCP should work on schedule so you are either right away and are in a quick profit or it basically reverses and you’re basically stopped out for a small loss.