Lesson 5 of 6 · Market Foundations
Trend vs. range
Price either trends or ranges.
A trend is a series of higher highs and higher lows going up, or lower highs and lower lows going down. A range is price bouncing between two roughly horizontal levels with no consistent direction. Different strategies work in each environment.
A ranging market.
Support is the lower level buyers keep defending. Resistance is the upper level sellers keep holding. In a range, you trade the edges. Buy near support. Exit near resistance.
A trending market.
Here the TREND label marks the direction. Each swing low is higher than the last. Each swing high is higher too. In a trend you lean with the move, buying pullbacks rather than fading the highs.
Price has made three higher highs and three higher lows over the past month. This is best described as:
Show the answer
A. An uptrend. Higher highs and higher lows is the textbook definition of an uptrend.