There are 4 representative screenshots of market conditions. These have their own parameters, but most of them will include some elements of the others, for examples:
A trending market will contain elements of a ranging market, a flat market isn't really flat, it will contain a certain limited ranging, since hardly any two charts are exactly alike, the interpretation is based on the experience of the beholder.
Trending Market
As can be seen from the chart below, a trending market is composed of a slopping upward or downward trend line, (Upward in this case, with higher high and higher low).
Notice that within this market there are elements of some of the others. In this case you can clearly seethe ranging activity within the larger trend. The spread in this type of market is usually very generous and it's one of the best markets to trade in. There is a defined pattern and direction. "Follow the Trend, Trend is your Friend"
Ranging Market
A ranging market is mostly characterized by a level and straight channel with no slope. Notice the price in the illustration ranges up and down in a well defined pattern. The 2 lines you see at top are because the smaller channel's top is contained within a larger channel.
Though this market isn't quite as gentle as the trending market, you can see by the medium spread price action that pips can be had by accurately calling the top and bottom of the channel. As in most cases, it's best to trade this kind of market well away from any news released.
Choppy Market
Take a real good look at the graph below, Why in the world would anybody want to trade in that type of market? It's a market that struggling with direction, and looking to make up it's mind. The entire gamut of candle shapes and wick sizes, there are doji and other small candles mixed in with huge candles, there are also candles with huge wicks, short candles, medium ones, large ones, huge candles and even bigger wick. This behavior is typical of a market that's not friendly at all. Notice, the market went through the choppiness because it was trying to establish a new direction, see the last 3 bull candles exiting the range in a very determined fashion. Further confirmation of why the market was choppy.
Flat Market
A flat market consists of a narrow ranging channel with very little spread, in the illustration that the pip spread hardly goes beyond 12 to 14 pips.
This is not the best market to trade in, experienced traders will test their skills to get some pips in this type of market. It's best to leave this market to the seasoned traders that can execute very tight scalping, this is not a friendly market by any stretch of the imagination.
Notice the preponderance of very small candles, lots of hammers, doji, spinning tops. Furthermore, the price action in many cases is restricted to less than 6 pips.
Fyi: None of the yellow lines been used to make the point are drawn exactly on the high's and low's. They have been used for illustrative purposes to get the main idea across and are not examples of accurate trendline depictions.
A trending market will contain elements of a ranging market, a flat market isn't really flat, it will contain a certain limited ranging, since hardly any two charts are exactly alike, the interpretation is based on the experience of the beholder.
Trending Market
As can be seen from the chart below, a trending market is composed of a slopping upward or downward trend line, (Upward in this case, with higher high and higher low).
Notice that within this market there are elements of some of the others. In this case you can clearly seethe ranging activity within the larger trend. The spread in this type of market is usually very generous and it's one of the best markets to trade in. There is a defined pattern and direction. "Follow the Trend, Trend is your Friend"
Ranging Market
A ranging market is mostly characterized by a level and straight channel with no slope. Notice the price in the illustration ranges up and down in a well defined pattern. The 2 lines you see at top are because the smaller channel's top is contained within a larger channel.
Though this market isn't quite as gentle as the trending market, you can see by the medium spread price action that pips can be had by accurately calling the top and bottom of the channel. As in most cases, it's best to trade this kind of market well away from any news released.
Choppy Market
Take a real good look at the graph below, Why in the world would anybody want to trade in that type of market? It's a market that struggling with direction, and looking to make up it's mind. The entire gamut of candle shapes and wick sizes, there are doji and other small candles mixed in with huge candles, there are also candles with huge wicks, short candles, medium ones, large ones, huge candles and even bigger wick. This behavior is typical of a market that's not friendly at all. Notice, the market went through the choppiness because it was trying to establish a new direction, see the last 3 bull candles exiting the range in a very determined fashion. Further confirmation of why the market was choppy.
Flat Market
A flat market consists of a narrow ranging channel with very little spread, in the illustration that the pip spread hardly goes beyond 12 to 14 pips.
This is not the best market to trade in, experienced traders will test their skills to get some pips in this type of market. It's best to leave this market to the seasoned traders that can execute very tight scalping, this is not a friendly market by any stretch of the imagination.
Notice the preponderance of very small candles, lots of hammers, doji, spinning tops. Furthermore, the price action in many cases is restricted to less than 6 pips.
Fyi: None of the yellow lines been used to make the point are drawn exactly on the high's and low's. They have been used for illustrative purposes to get the main idea across and are not examples of accurate trendline depictions.