Price Action: Common Signals of a Trend Entering a Trading Range

When a trend has been running for a while and momentum begins to weaken, it may enter a trading range. Typical signs of weakening momentum include:
Fewer trend bars, with more small-bodied bars or trading range bars appearing
Pullback depth increasing, even reaching or exceeding half of the previous swing
False breakouts becoming more frequent
Closing prices no longer near the trend-direction extreme, but returning to the middle area

In a bull trend, if price makes two consecutive new highs that are quickly pulled back, and the distance between highs narrows, this often means the bulls are losing their edge, and the market may be entering a trading range.

Common Signals of a Trading Range Entering a Trend
A trading range sees price oscillating back and forth until one side completely defeats the other, at which point it enters a trend phase.
A clear, directional trend bar appears with an extreme close, directly breaking through the range boundary
After the breakout, price does not immediately return to the range but continues to move in the breakout direction
The breakout direction aligns with the trend on a higher time frame

If the breakout occurs at the edge of a range that has been compressing for a long time, and the background supports that direction, the probability of trend continuation is very high.

Trading Strategies During Trend-to-Trading Range Transitions
Trend to Trading Range:
When you notice that trend momentum is clearly weakening, lower the priority of trend-following trades
Focus more on counter-trend trades at the edges of the range
Limit orders and scalping will have higher win rates

Trading Range to Trend:
Wait for a clear directional breakout bar at the edge of the range, and enter on the breakout pullback
If there is no obvious pullback after the breakout, you can follow with a small position and add after continuation is confirmed
In the early stages of a trend, try to maximize the profit potential of your position and avoid exiting too early

The transition between trends and trading ranges is the core of market rhythm changes. Mastering it allows you to avoid chasing trades at the end of trends, or missing opportunities at the beginning of trends.