Trading Range – what it means

The trading range is in fact a sideways chart pattern. It is frequently used to represent a resting period before the original trend takes up again. You possibly will see these when you are charting trends and should know what they mean.

Often trends are very crucial to investors. Those who engage in trend-following are people who look at major trends and make decisions in the direction of the trend. This can be a good tactic; however you should know a great deal about trends and the market in general in order to use this method successfully. New investors are not generally very good at tracking trends and using trend-following techniques. One thing that you must also understand is that some price movements do not have trends. This means that the direction is not clear, which makes trend-following nearly impracticable.

Keep in mind, that in order to completely understand trends, you must be knowledgeable in the ways of the market and foreign exchange as a whole. New investors should not rely greatly on foreign exchange market trend tracking. Once you are more familiar with the market, you can start thinking of trend tracking. Nevertheless, understand that a lot of situations impact and influence the Forex. These influences can change what people imagine trends will be. Consequently, you should be an experienced trader before you can rely on the trends and ranges completely. Learn the terms and learn to identify them in the real market situations. Understanding the terms are not enough, being able to identify them and use them in real life situation is important.