11/17/2023 0 Comments Flat top breakoutThe market is in anticipation of a big announcement The lack of trigger events such as quarterly / annual result announcements, new product launches, geographical expansions news, collaborations, etc. There are 2 possible reasons for a market to trade in a range: This usually takes place during a period of consolidation before the price continues a prior trend or reverses into a new trend (a breakout). Hence, it is essential for traders to know how a price range is formed, what constitutes a true breakout or what prolongs a Sideways trend, so that they can recognise the change in phases.īefore exploring how to differentiate between a true and a false range breakout, let us first understand when and how a range or Sideways trend occurs.Ī Sideways trend is a horizontal price movement that occurs when the forces of demand and supply are relatively equal. This leaves us with the remaining one-third of the time, where the market is trending in a pronounced direction. When analysing market trends and movements, we find that two-thirds of the time, trades fluctuate in a price range without any significant up or down trend.
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