Original subtitles

Let's talk a little bit more about how we can use the trading range as a technical analysis tool when

we're evaluating might be going on here.

And as we know, the range is the distance between the low and the high of a price.

And we learn how we can identify spikes where there's these broad ranges in terms of the high and low.

But there's other ways that we can use trading ranges as well.

So let's look at some of some of those and kind of have an understanding of it.

And it can be a leading indicator as far as a price change that is coming.

When we start seeing these ranges between high and low, there might be kind of a something's coming.

That's why we call leading indicator versus something that's maybe more of a lagging indicator.

So it can be very helpful that way as well.

So if we look at trading ranges, we can look at range expansion and range contraction, you know,

so if we look at these examples here on the left, we have range expansion.

You can see that the price bars just that middle part and we're looking at that range are lengthening

over time.

You can look from going from left to right how they tend to be lengthening.

And that would suggest the continuation pattern.

As far as you know, if it's expanding, that whichever way it's going could be up or could be down,

you know, could be, you know, continuing to go in that in that in that pattern or continuation if

we look at a range contraction.

That's where the price spikes are shortening over time, and you can see from the left to the right

on the right hand image there how the bars are getting much, much shorter.

And that suggests a trend reversal may be coming up soon, too.

So if we as well as using these other indicators, we'll learn all through the course.

You start looking at range expansion rates, contraction versus a continuation or a trend reversal might

be being indicated by the patterns within the price bar themselves as far as what may be going on here.

So range expansion and contraction don't tell us anything about the existing direction of the price

move, just more so whether it would continue a continuation pattern or that trend might reverse because

it could go either way, depending on whether they're contracting or expanding.

But the range can expand or contract in both upward and down trends so they can do it both ways.

But it's more of range expansion.

Is a continuation pattern going to keep going in the same direction?

And a range contraction might show a trend reversal or basically flattening out or changing the trend

is the big idea behind that.