How to distinguish between ranging and trending price behaviour?

I bought a book about Price Action and I asked the author of the book to make some part of his book clear for me. He said in one of his e-mails:

You need to be able to distinguish between ranging and trending price behavior…you need to figure this out for yourself by looking at charts. if you haven’t read my other ebook you should do so. This stands at the core of every strategy not just mine.
I bought his other book but I got more confused and it didn’t talk about price behavior at all. Well I know I have been tricked by him. BUT I still don’t understand it. Anyone could explain it better with images or just send me a link. I’m in the middle of a learning process here and I know if I give up now I’ll give it up forever.

He said it very clear. Look at the chart.
A trend is composed by higher highs and higher lows (for uptrends). Anything else is a range.
You could use an ADX indicator, but an average trained eye can do better.
Another good way is to draw lines between lows (for uptrends) or highs (downtrends). If the majority of the highs (for downtrend) are close to that line you are still in the trend.
Another, use MA 100, 200 or whatever suits you. If price is below MA then you might be in a downtrend.

A range is bound between two horizontal lines. Some are little bit inclined.
A range can be also bound between Bollinger bands.

But the best method is to look at the charts. The human brain is the best neuronal network that can classify anything , even things that you are not aware of. Practice.

Some things can’t be taught, but can be learned. This is one of those things.

very helpful thank you

Nicely put CodeMeister. Identifying chart patterns like trending and ranging in the real world of trading can sometimes be tough depending on your style of trading. You just gotta put in the chart time, which means hundreds–if not thousands of hours–analyzing charts to internalize patterns and gain experience.

Here’s a School of Pipsology section in case you missed it: School of Pipsology Market Environment

But yeah, as Codemeister and marsalis have pointed out, this is one thing that you really have to have practice in order to identify at sight. Wish you the best of luck on this, man.

Fjanos,

A somewhat similar question came up last week. Here’s a cut & paste of my reply to that post.

link to The Queen’s Outlook on the Aussie

link to Watchlists, Directional Bias, and Time Frame Selection Guidelines | Forex Blog: Chartology

There are different approaches identifying a trending market and a ranging market as a matter of fact some believe
every time frame holds its own market structure, however stability is questionable on lower once.

Now on a daily chart a healthy trend would look like this.


Notice the yellow line, a healthy trend moves a bit then has a pullback and moves further. There are many times where you will
notice price doesn’t move anything like that example but still manages to push a considerably.

However the seasoned trader trades in conditions that are picture perfect and meets criteria he/she is comfortable with.
That is what will make them money in the end in the long run.

Cheers

The strategy of the author who wrote the before-mentioned book I don’t want to get in details because of Property rights but He stresses on finding the HIGHs and Lows in charts HH, HL uptrend , LH, LL downtrend. He even considers something a trend when the chart only makes Highs and Lows. That’s why I 'm confused because for me ranging market means when price bounces in between support and resistance levels in which price can’t seem to break through (or just a little bit). For him ranging means that is a small wave within the bigger wave. For him the trend when it starts making HH, HL or LL, LH. For me a trending market is one in which price is generally moving in one direction (down or up) and breaks the support or resistance.

Identifying The Trend - YouTube
Range Trading - YouTube

This might help

You’re both somewhat right but the author’s version is just more complicated. I agree with your points although a trend doesn’t necessarily have to break support or resistance. It can start wherever. I don’t agree with the author about ranges though. It doesn’t have to be a wave within a wave. Sometimes price could simply bounce between strong support and resistance levels.

Good luck with this!