Trend & Range

Key idea

Every instrument is always in one of two states: trending (making a sequence of higher highs and higher lows, or lower highs and lower lows) or ranging (oscillating between a fairly stable high and low with no clear sequence). Almost every other structural read — support, resistance, break of structure — only makes sense once you've correctly labelled which state you're in.

How to apply it

• Zoom out to the timeframe one or two steps above the one you trade and label the last 6-10 swing points.
• If highs and lows are both rising, or both falling, treat it as trending — favour continuation setups in that direction.
• If highs and lows are overlapping with no clear sequence, treat it as ranging — favour fading the edges over chasing breakouts.
• Re-check the label after every new swing point; structure state changes gradually, not instantly.

Example

QQQ prints a swing high, pulls back, then prints a higher high and a higher low. That's two consecutive higher lows — enough to start treating the instrument as trending up and looking for pullback entries rather than reversal shorts.

Checklist

• I can point to the last 3-4 swing highs and lows on the higher timeframe
• I've labelled the current state as trending or ranging, not both
• My setup type matches the state (continuation in trend, fade in range)
• I'm not forcing a trend label onto two data points

Common mistakes

• Calling a trend from a single strong candle instead of a sequence of swings
• Trading breakout setups inside an obvious range
• Ignoring the higher-timeframe state while trading a lower-timeframe pattern
• Relabelling the state every few candles instead of waiting for confirmation