Trading ranges do not have set patterns. Prices may twist and | TRADERS ACADEMY

Trading ranges do not have set patterns. Prices may twist and turn in a myriad of ways before a trading range is resolved. In general, however, trading ranges are rectangular shaped with prices swinging back and forth between the upper and lower boundaries or coiling into apexes. But we are concerned with the dynamics of trading ranges rather than any geometrical shape. When trading ranges evolve over many months or years, they often expand their boundaries and contain numerous smaller ranges. The bound aries of trading ranges are repeatedly tested and/or penetrated as the buyers and sellers struggle for dominance. Whenever the boundaries are breached, follow‐through or the lack of follow‐through becomes the deciding factor. After breakouts or breakdowns occur, prices often retest these areas.