What is the difference between trending and ranging?

<p id="isPasted">In trading, a trending market is characterized by prices moving consistently in one direction (either up or down), while a ranging market (also called a sideways or range-bound market) sees prices moving within a defined horizontal range, bouncing between support and resistance levels without a clear directional bias.&nbsp;</p><p>Here's a more detailed breakdown:</p><p>Trending Market:</p><p>Directional Movement: Prices consistently make higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend).&nbsp;</p><p>Momentum: There is strong momentum in one direction, indicating a clear trend.&nbsp;</p><p>Potential for Reward: Trending markets offer the potential for significant profits by capitalizing on the established trend.&nbsp;</p><p>Higher Risk: The risk is also higher as prices can reverse direction at any point.&nbsp;</p><p>Trend-Following Strategies: Trading strategies focus on identifying and following the existing trend.&nbsp;</p><p>Ranging Market:</p><p>Sideways Movement:</p><p>Prices move within a defined range, bouncing between support and resistance levels, without a clear directional bias.&nbsp;</p><p>Lack of Momentum:</p><p>There is not enough momentum for prices to break out of the defined range.&nbsp;</p><p>Lower Risk:</p><p>The risk is generally lower compared to trending markets, as prices are less volatile.&nbsp;</p><p>Potential for Reward:</p><p>The potential for reward is also lower, as the price movements are limited within the range.&nbsp;</p><p>Range-Bound Strategies:</p><p>Trading strategies focus on identifying and trading within the established range, buying low and selling high.&nbsp;</p>

<p id="isPasted"><strong>Trending Market</strong></p><p>Definition: The price moves consistently in a single direction, either upwards (uptrend) or downwards (downtrend).&nbsp;</p><p>Characteristics:</p><p>Uptrend: Higher highs and higher lows.&nbsp;</p><p>Downtrend: Lower highs and lower lows.&nbsp;</p><p>Direction: Features a clear, sustained directional bias.&nbsp;</p><p><strong>Ranging Market</strong></p><p>Definition: The price moves sideways, oscillating between a defined horizontal range of support and resistance levels.&nbsp;</p><p>Characteristics:</p><p>Support and Resistance: Prices bounce between established high and low points.&nbsp;</p><p>No Dominant Trend: Neither buyers nor sellers have enough control to push the price significantly in one direction for a sustained period.&nbsp;</p><p>Sideways Pattern: Often appears as a horizontal or sideways pattern on price charts.&nbsp;</p>