Trend vs. sideways market

Trends and ranges call for different approaches: a trend rewards holding a position and giving it room to breathe, while a range rewards trading closer to the edges of the channel and taking profit sooner, because there's no sustained directional push to ride.

For example, an asset bouncing repeatedly between $58,000 and $62,000 for several weeks without closing outside either level is ranging; that same asset printing a series of progressively higher highs and higher lows over that stretch is trending.

A common mistake, flagged directly in the trading knowledge base, is carrying the same position sizing and 'hold through the drawdown' mindset from a strong trend into a ranging market, where that approach tends to produce a string of frustrating stop-outs instead.