Can someone please clarify for me the difference between "Trend" and "Range?" I THINK one of the terms refers to the little sub peaks and valleys that make up a broader high or low, right?
Joined May 2005
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Status: I am not your bro
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The truest definition of a bullish trend is one where the market makes higher highs and higher lows. A bearish market is one where the market makes lower highs and lower lows.
A rangebound market is one in which previous highs and lows are respected and not exceeded.
Since indicators are derrived from price they are lagging in nature and will not always accurately alert you to a valid reversal. If you think about it, the beloved head and shoulders pattern is simply an example of the failure to make a higher high or, in the case of an inverted H&S, a lower low.
