The longer it range, the harder it breaks

[Nevhulaudzi rudzani]

Here’s the thing:
The market is always changing.
It moves from a range market condition to trending market, and back to range market.
And in my experience, the longer the market is in a range, the harder it breaks.
Here’s why…
When the market is in a range, traders will look to long Support and short Resistance.
And can you guess where will they put their stop loss?
Probably below Support and above Resistance.
Now…
As time passes, this cluster of stop-loss will increase as more traders fade the highs and lows of the range.
But the market has to breakout, eventually.
Now let’s say for example, the market breaks out higher.
What happens next?
Well, there are momentum traders (or Trend Followers) who goes long on the breakout. Plus, you have short traders cutting their loss (from shorting Resistance) which fuel further buying pressure.
And this leads to a strong breakout and possibly the start of a new trend.
So the bottom line is this…
The longer it range, the harder it breaks

 

[Shallen Berry]

Here’s the thing:
The market is always changing.
It moves from a range market condition to trending market, and back to range market.
And in my experience, the longer the market is in a range, the harder it breaks.
Here’s why…
When the market is in a range, traders will look to long Support and short Resistance.
And can you guess where will they put their stop loss?
Probably below Support and above Resistance.
Now…
As time passes, this cluster of stop-loss will increase as more traders fade the highs and lows of the range.
But the market has to breakout, eventually.
Now let’s say for example, the market breaks out higher.
What happens next?
Well, there are momentum traders (or Trend Followers) who goes long on the breakout. Plus, you have short traders cutting their loss (from shorting Resistance) which fuel further buying pressure.
And this leads to a strong breakout and possibly the start of a new trend.
So the bottom line is this…
The longer it range, the harder it breaks

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