Types of market - Ranging and Trending



You will hear the forex market being referred to as either ranging or trending. Depending on the type of price movement will depend on how traders view and trade the market on any given day.

Trending

A trending market is where price will move up in a series of higher highs and higher lows but the overall direction is up. Or price will be moving down in a series of lower lows and lower highs but the overall direction is down. A trend may last anything from a few minutes to several months.

Ranging

A range bound market is where price is moving (bouncing) between two points. The higher price would be acting as resistance because it is preventing price from moving above it and the lower price would be acting as support because it is preventing price from moving below it. If the range is small with the high and low points being close together, the market would be considered to be "choppy". The market is moving sideways with very little upward or downward movement.


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