Guys what does it mean when a pair is trending or ranging sorry stupid question I know I’m still very new
In forex as in life no question is stupid and not knowing the answer can be costly.
a trend is ongoing, drop a moving average on your chart, if the price action follows along you have a trend.
If the price action bounces back and forth between two outer trend lines more commonly known as support and resistance that is ranging.
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Trading forex in ranging markets is a simple prospect. You simply buy as price approaches support and sell as price approaches resistance.
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You’re very new so you have to start by asking questions. Don’t be worried - the only stupid question is the one that you didn’t ask and which cost you money as a result.
But you have done well for a start - in the subject area of technical analysis, you have asked to know about the most fundamental chart or price action pattern - trend. You might learn and trade 100 other chart patterns and 100 trading strategies, but all of them make more money if they lead into a trend.
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Midwest answered your initial question above, but I’d also recommend to go through the School of Pipsology here on Babypips for more detailed information.
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Trending refers to price action that follows a relatively constant direction (up or down) for a given period of time (e.g. a long uptrend or downtrend). When a market is trending, there can still be peaks and valleys, but the overall direction is generally upwards or downwards, especially when you zoom out or look at the higher time-frames.
Ranging refers to price action that bounces inside of a horizontal channel (a lot of ups and downs within a given range). Typically, support and resistance is well-defined within ranging price action, but break-outs and fake-outs can still occur.
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Have you been though the school of Pipsology?
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I’m busy going through it thank you
As you newbie; you should follow the trendy market & horizontal ranges only!
I only take trend-following trades. There are few of these signalled when the market is flat, which is good because the trend-following trades taken at such times are unlikely to be very profitable. Its not how many trades you can take, its how many to win.
When the market is more trending, I get more signals and these are higher probability, which is good.
Recently the forex market has been very flat. A week ago, the average weekly bar overlap for the most important 28 pairs was 8 bars. As of last Friday this has reduced to an average of just under 5. I am seeing more entry signals.
Don’t make the mistake of thinking that the EUR/USD for example and the AUD/CAD are not connected, or that CAD/CHF is unconnected with NZD/USD - they’re different fish but they swim in the same sea.
@bardebra I see a Trending market as either the bulls (buyers) or bears (sellers) being excessively aggressive. The movement is usually being triggered by either price Action, quantitative analysis, fundamental analysis, sentimental analysis or combination of these strategies. Much triggered by the big boys too
I see a Ranging market as a resting point for the bulls or bears, more like consolidation. The market must have been bullish or bearish before ranging, so after ranging it is either there will be a continuation of that trend or a complete reversal. Retail traders confuse this reversal with retracement alot and i was part of those traders, I was once a big meat for the market makers with real money. The fact is that trade dealers use a Ranging market as an advantage over retail traders, they make you think it will reverse not knowing it is just a short retracement for a long continuation. Any suggestion on how to trade the Ranging market effectively will be highly appreciated.
I only ever trend with the trend.
You mean trade with the trend?
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Trending higher means every succeeding price is higher than previous, trending lower is that price becomes lower and lower. While in ranging mode you can’t say anything about trend - i.e. third and the hardest case for a trader where we should avoid trading.
A range can be interesting I guess but not for me. Though I do know some range traders.
Basically, horizontal ranges are easy to use; others are too much complicated to use!
please do please
Now I am in mobile phone; every soon I will show you example (picture) of horizontal ranges! By the way, this thread is also correlated: What is a Range-Bound Market? - BabyPips.com
Here range bound market is the same as like horizontal range.
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Please check the previous reply; I have shared a valid thread.