Some traders mistakenly believe that markets are always trending — assuming that if they just find the right trend, they can ride it continuously for easy profits. However, markets spend a significant amount of time consolidating, ranging, or moving sideways, not trending clearly up or down. Believing that markets are always trending leads to frustration, false signals, and poor trade decisions if you are not prepared for different phases of market behaviour.

Let’s explore why markets alternate between trending and ranging, how to recognise the difference, and how to adapt your trading strategy accordingly.

Why Some Traders Believe Markets Are Always Trending

This myth comes from:

• Overemphasis on trend trading: Most trading education focuses heavily on “trend is your friend” without discussing sideways conditions.
• Simplified backtesting: Many strategies tested only during trending periods seem extremely profitable, creating an unrealistic picture.
• Psychological bias: Traders naturally like clear narratives — uptrend or downtrend feels easier to interpret than messy sideways moves.
• Selective memory: Traders often remember strong trending periods vividly and forget the frustrating consolidations between them.

In reality, markets move through distinct phases — and not all of them are trending.

How Often Do Markets Actually Trend?

Research and experience show:

• Markets trend roughly 30% of the time: The remaining 70% is often sideways, choppy, or consolidating.
• Trending phases are often preceded and followed by consolidation: Markets “rest” after big moves before choosing new directions.
• Trends vary by timeframe: A market may trend on a daily chart but range on an hourly chart, or vice versa.

Understanding timeframes and phases is critical to trading success.

The Three Main Market Phases

Markets move through three basic states:

• Trending: Prices make higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend).
• Ranging: Prices oscillate between support and resistance without clear direction.
• Transitional: Markets break out of ranges or reverse trends, often with increased volatility and fake moves.

Recognising which phase the market is in is more important than assuming it is always trending.

How to Identify Trending vs Ranging Markets

Signs of a trending market:

• Clear directional bias: Successive higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend).
• Moving averages aligned: Shorter-term MAs above (or below) longer-term MAs.
• Momentum indicators confirming strength: RSI or MACD supporting the trend direction.

Signs of a ranging market:

• Flat or sideways moving averages: No clear slope or separation.
• Price stuck between support and resistance: No new highs or lows.
• Oscillators bouncing between overbought and oversold: Choppy conditions.

Accurate market phase identification allows smarter strategy selection.

Trading Strategies for Different Market Conditions

In trending markets:

• Trend-following methods work best: Moving average crossovers, pullback entries, breakout trades.
• Risk-reward ratios can be larger: Holding trades longer for bigger moves.

In ranging markets:

• Mean-reversion strategies succeed: Buying support, selling resistance, fading extremes.
• Shorter holding periods are wiser: Quick profits before price reverses again.

Adapting your strategy to the market phase — not hoping for trends — is key.

Common Mistakes from Believing Markets Always Trend

Traders who believe this myth often:

• Force trades during consolidations: Chasing breakouts that never develop.
• Get whipsawed: Suffering multiple small losses when price chops sideways.
• Over-leverage in false trends: Getting caught when a supposed trend fails and reverses.
• Ignore clear signals of exhaustion: Missing the signs that a trend is ending and the market is shifting.

Flexibility is more profitable than rigid assumptions.

Best Practices for Trading All Market Phases

To succeed:

• Assess the environment before trading: Identify trending vs ranging conditions first.
• Adjust your tools: Use trend-following indicators in trends and oscillators in ranges.
• Manage expectations: Accept that not every day will produce a perfect trend.
• Stay patient: Sometimes the best trade is waiting for a breakout or new trend confirmation.

Being a professional trader means adapting — not demanding.

Conclusion: Markets Are Not Always Trending — Adaptability Wins

In conclusion, markets are not always trending — and expecting continuous trends is a fast track to frustration and losses. Markets cycle between trending, ranging, and transitional phases. Traders who learn to recognise these phases and adjust their strategies accordingly are the ones who survive and thrive. Flexibility, patience, and situational awareness are the true edges — not rigid trend-chasing.

If you want to master the skills needed to trade confidently in all types of market environments, explore our Trading Courses and start building a professional, adaptable trading strategy today.