07. Reading a sideways market

LESSON 07 OF 13 · FIND THE BOUNDARIES FIRST

Reading a sideways market

Map the upper edge, centre and lower edgeOriginal educational schematic. Map the upper edge, centre and lower edge. This illustration is not market data.120110100Range boundaries defined by priceCentre / flat KijunCrosses near the centre can repeat

Original schematic · For learning, not a market forecast.

Ichimoku can help describe consolidation as well as trends. A flat Kijun, repeated price crossings and closely grouped lines suggest a balanced range. Verify that impression against actual highs and lows.

Draw a three level map

Mark the upper boundary, lower boundary and midpoint. The middle is where signals often alternate; it is not the same decision area as a test of the edge. Define the range from price structure rather than assuming the cloud is its boundary.

If a newer midpoint sits above an older, longer term reference, balance may be shifting upward. That can support a breakout scenario, but price still has to leave the range and remain beyond it.

Watch for failed breaks

For example, a range of 100–120 has a centre at 110. A move to 121 followed by a close back at 117 has returned inside the range. Record the failure rather than continuing to describe an established breakout.

Check your understanding

Which matters more for identifying this range: a single Tenkan–Kijun cross or repeated rejection of 100 and 120?

Reveal the explanation

Repeated behaviour at the boundaries. A cross near the centre can occur without a change in the range.

Further reading: Kojiro’s Japanese Ichimoku lesson 07. This English lesson and its diagram were independently written and created by Ichimoku Master.

Kei with the original Japanese Ichimoku books

AUTHOR

Kei

Kei is a Japanese forex trader and mentor who has traded since 2013. He teaches Ichimoku in English from the original Japanese texts, with a focus on chart analysis, trading psychology and risk management.