Volatility Compression and Expansion Patterns in 6B Futures
6B British Pound futures constantly rotate through phases of compression and expansion. If you can spot compression early, you’ll catch the breakout before everyone else piles in. Most traders get chopped because they try to trade inside the compression instead of waiting for the expansion.
What Volatility Compression Looks Like in 6B
Compression is simple: price gets tighter, candles shrink, volatility dries up, and the market builds energy. In 6B, compression usually forms before:
- BOE announcements
- UK/US economic data
- London session open
- New York early session continuation
This behavior reflects the same cyclical principles shown in Market Volatility Cycles: How Volatility Expands and Contracts.
The Three Types of Compression You See in 6B
1. Range Compression
Tight sideways structure. This usually breaks aggressively in the direction of the underlying trend.
2. Wedge Compression
Lower highs and higher lows. Pressure builds until one side caves in.
3. Micro Pullback Compression
Small, slow retracement inside a strong trend — often leads to a continuation burst.
How Expansion Works in 6B
Expansion is when price finally leaves the tight structure and volatility spikes. It’s usually violent.
| Sign of Expansion | Meaning |
|---|---|
| Large breakout candle | Institutional orders hitting the market |
| Fast reclaim of a key level | Liquidity sweep → real move |
| Volume jump | Momentum confirming direction |
Where 6B Breakouts Most Often Go Wrong
Fake breakouts happen when traders jump on the first candle. The smarter play:
- Wait for the retest
- Confirm structure shift
- Enter only once volatility expands and stabilizes
This logic matches the clean structure principles from Market Structure Breaks: Spotting Shifts in Control.
The Best Setups After Compression
- Breakout → Retest → Continuation
- Stop sweep → Reclaim → Trend move
- False break → Reverse trend extension
Final Thoughts
Compression is the calm before the storm in 6B. Learn to spot the coil, wait for the expansion, and you’ll catch the cleanest moves the Pound futures market offers — without getting shredded inside the chop.