{"id":1153,"date":"2024-01-25T05:45:41","date_gmt":"2024-01-25T05:45:41","guid":{"rendered":"https:\/\/tradeafricahub.com\/?page_id=1153"},"modified":"2024-01-25T05:45:44","modified_gmt":"2024-01-25T05:45:44","slug":"market-environment-ranges-vs-trends","status":"publish","type":"page","link":"https:\/\/tradeafricahub.com\/index.php\/market-environment-ranges-vs-trends\/","title":{"rendered":"Market Environment \u2013 Ranges vs Trends"},"content":{"rendered":"\n<h1 class=\"wp-block-heading\"><\/h1>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>Hello traders, in this lesson, we will have a look at different types of trading environments.&nbsp;<\/p>\n\n\n\n<p>Table of Contents<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Market environments \u2013 range vs trend\n<ul class=\"wp-block-list\">\n<li>Trends<\/li>\n\n\n\n<li>Ranges<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Market environments \u2013 range vs trend<\/h2>\n\n\n\n<p>Recognizing these early on and adjusting our trading strategy to them is one of the most important things to do.&nbsp;Trading ranges and trends require almost diametrically different approaches. But before we go into that, let\u2019s cover some basics&nbsp;and demonstrate how they look.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Trends<\/h3>\n\n\n\n<p>Simply put, the trend is when the price is going either up or down.&nbsp;To give this more technical explanation, an uptrend is represented by higher highs and higher lows.&nbsp;If we look at the chart that shows higher highs and higher lows, we can see that lows and highs are made by a pattern of three&nbsp;candlesticks next to each other.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c-3.jpg?ssl=1\" alt=\"\" class=\"wp-image-208\"\/><\/figure>\n\n\n\n<p>These are called swing highs and swing lows.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c-4.jpg?ssl=1\" alt=\"\" class=\"wp-image-209\"\/><\/figure>\n\n\n\n<p>A swing low is made when the price makes a low on the second candle, and the first and third candles are not exceeding that low.&nbsp;The same goes for swing high, which is made when the price makes high on the second candle, and the first and third candles are not exceeding that high.&nbsp;&nbsp;So as we can see in this example of an uptrend, when the price slows down and creates a pullback lower, a swing low is made, and the price moves higher.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2021\/03\/obrazek-3.1.png?ssl=1\" alt=\"\" class=\"wp-image-3044\"\/><\/figure>\n\n\n\n<p>Lower lows and lower highs represent a downtrend.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2021\/03\/obrazek-3.4-1_21.png?ssl=1\" alt=\"\" class=\"wp-image-3045\"\/><\/figure>\n\n\n\n<p>In a downtrend, we look for short-term rallies that create swing highs, which usually offer an opportunity to sell.<\/p>\n\n\n\n<p><strong>When are trends changing?<\/strong><\/p>\n\n\n\n<p>If we are in an uptrend and the last swing low that lets to a highest high is broken, we can consider a trend change or at least a pause.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2021\/03\/obrazek-3.2.png?ssl=1\" alt=\"\" class=\"wp-image-3046\"\/><\/figure>\n\n\n\n<p>The same goes for the downtrend, if the last swing high, which lets the lowest low, is broken, we can look for buying opportunities or at least a slowing down.&nbsp;Although these examples look very straightforward, things are more complicated in real markets.&nbsp;Swing highs and lows are often violated, yet the price continues in its direction.&nbsp;There are several reasons why this might happen, and it is something that we will cover in future videos.&nbsp;In a trending market, we can use different indicators to help us stay in the trends.&nbsp;The most popular ones are moving averages, Ichimoku cloud, and MACD, and they are used for building different trend following strategies.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2021\/03\/obrazek-3.3.png?ssl=1\" alt=\"\" class=\"wp-image-3047\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Ranges<\/h3>\n\n\n\n<p>In ranging markets, price is bouncing between specific highs and lows.&nbsp;The high is acting as resistance and the low is acting as support.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c-5.jpg?ssl=1\" alt=\"\" class=\"wp-image-210\"\/><\/figure>\n\n\n\n<p>Ranging markets are also called sideways or bracketing markets.&nbsp;When we are in the ranging markets, we are not looking to capture moves but rather use mean-reverting strategies.&nbsp;Mean-reverting strategies work on the assumption that the underlying asset will eventually return to the mean once it deviates from it.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2021\/03\/obrazek-4.2.png?ssl=1\" alt=\"\" class=\"wp-image-3049\"\/><\/figure>\n\n\n\n<p>Our mean can be anything, from moving average, volume-weighted average price, or price level.&nbsp;From this mean, we calculate standard deviations. Once the price reaches those standard deviations, we can bet on a return to the mean.&nbsp;The problem with mean-reverting strategies is that the market can start trending, and we will get caught on the wrong side of the market.&nbsp;One of the most popular mean-reverting indicators is Bollinger Bands, RSI or stochastic.&nbsp;So is it better to follow trends or mean-reverting?&nbsp;That is up to you and our personal preference.&nbsp;In general, markets are more ranging than trending, but a lot of money can be made in huge trends.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hello traders, in this lesson, we will have a look at different types of trading environments.&nbsp; Table of Contents Market [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_themeisle_gutenberg_block_has_review":false,"footnotes":""},"class_list":["post-1153","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Market Environment \u2013 Ranges vs Trends - TAH<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradeafricahub.com\/index.php\/market-environment-ranges-vs-trends\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market Environment \u2013 Ranges vs Trends - TAH\" \/>\n<meta property=\"og:description\" content=\"Hello traders, in this lesson, we will have a look at different types of trading environments.&nbsp; 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