Trading ranges, breakouts and pullbacks in price action

In the previous chapter of our guide, we introduced you to the basic terms, concepts and advantages of price action trading, and particularly in trending markets. The following chapter will aim at providing you with useful knowledge of what to expect when the market is in somewhat equilibrium, thus it is bound in a trading range. Due to the specifics of two-sided market movement and its differences in trading compared to strong trends, we will try to best highlight the main peculiarities of this trading environment and explain what traders, especially the beginners, must avoid.

Moreover, you will be more thoroughly acquainted with the concepts of breakouts and pullbacks, upon which we laid eyes in the first chapter. However, now we will mainly focus on these market moves as a shift in market momentum after a trading range, while also underscoring some of their specifics in trend trading. Most importantly, we will argue why a trader, especially an inexperienced one, must not go against the market and what to look out for during trading ranges, including the worst of them all – the so-called “barbed wire” pattern.

You are welcome to start reading the second chapter of our guide, beginning with the article “Overview of Trading Ranges”. We look forward to helping you become a better trader!