What Causes Market to Go Sideways?

Do you trade in stock market?

[{"selector":"#anim-d681d291-fdcf-4f20-8f26-f30cf5a35b2c","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-84733931-3be3-4580-9b05-c3a7fbcc03d5","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Have you ever wondered why does market exactly at support and resistance levels react and go sideways? Have you ever wondered why does market exactly at support and resistance levels react and go sideways?

[{"selector":"#anim-d806c057-ec81-4ebf-89a6-2da2029e06e1","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-25db5509-f088-4287-9ef8-307497dcbbc2","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] If you do not know what causes stock market to go sideways then I will be unveiling this secret to you. If you do not know what causes stock market to go sideways then I will be unveiling this secret to you.

Buyers Trade Before Breakout

[{"selector":"#anim-7e93ed99-85a9-4cbc-b772-f93f5b336ef9","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-f70be23c-9777-4656-9a6a-6f01dbb0282d","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] What happens is at resistance level some traders assume market will break the resistance so they buy before the breakout occurs.

Buyers Stuck in Losing Trade

[{"selector":"#anim-c6f24d29-f301-4908-9d37-8af4d5375600","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-9be8fb42-2859-44b1-9b06-dfd06f0cce03","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] But, instead market takes resistance at that level and reverses, now these traders are stuck in a losing trade which they will be holding till the next support level break.

Sellers Enter Before Breakout

[{"selector":"#anim-90328f7c-5ef1-4ec3-83fc-917feea13fdd","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-89d80e22-d975-4dc8-83f0-74eef45e08d0","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Now, when support level comes some novoice traders sell and take early entries in hope that market is going to give a breakdown and they do not wish to miss the move. So they sell before breakdown.

Sellers Stuck in a Losing Trade

[{"selector":"#anim-7f974919-4100-4067-a4ec-2436fc8ea76e","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-da9005b3-cfe8-4390-a954-649f3a32c6d2","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] But, as expected market takes support there and reverses. These traders too now stuck in a losing trade that they will be holding till the resistance is break.

Buyers Exit at Breakeven

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Sellers Exit at Breakeven

[{"selector":"#anim-47941a4d-d8f4-44d8-bb9a-3b9cdc43bea2","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-6f943bf0-77be-4438-9887-f5eb95552463","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Exactly when market tests support again, sellers square off their positions, which means they are placing buy orders which then again takes the market up. Similar reaction can be seen near resistance level.

Cycle Repeats

[{"selector":"#anim-98ad99eb-5c9c-4ab0-a4ea-6e8ae8044059","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-893ef96c-fc89-4812-be7a-5ed2ab4c131c","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] This behavior repeats. This is how market goes sideways.