Technical definition of sideways - price is not making higher highs (going up) or lower lows (going down).
Here is an example - Eurostoxx50 (Daily) over 2016. Long period in the middle of sideways visualised as a channel which is parallel to the bottom or the top of the chart. The blue arrows show moves which are clearly not sideways - making higher highs or lower lows
Now look at the Bitcoin chart - up 122% for 2016 - cannot by any stretch be defined as going sideways unless you take a view that goes all the way back to 2013.
Long periods during the year when it was going sideways - marked as purple channels in between the not sideways blue arrows.
The way I test it is if I can draw a parallel channel that has multiple touches at the top and the bottom. Next chart goes all the way back to 2013 highs.
thank you for the detailed and visual explanation. I find that often times these simple analytical tools are just brushed over and therefor are not understood on a fundamental level.
Technical definition of sideways - price is not making higher highs (going up) or lower lows (going down).
Here is an example - Eurostoxx50 (Daily) over 2016. Long period in the middle of sideways visualised as a channel which is parallel to the bottom or the top of the chart. The blue arrows show moves which are clearly not sideways - making higher highs or lower lows
Now look at the Bitcoin chart - up 122% for 2016 - cannot by any stretch be defined as going sideways unless you take a view that goes all the way back to 2013.
Long periods during the year when it was going sideways - marked as purple channels in between the not sideways blue arrows.
The way I test it is if I can draw a parallel channel that has multiple touches at the top and the bottom. Next chart goes all the way back to 2013 highs.
Note: this is a weekly chart.
thanks, makes totally sense
thank you for the detailed and visual explanation. I find that often times these simple analytical tools are just brushed over and therefor are not understood on a fundamental level.