The financial market knows only three major states: trend, range, and reversal. A bit like the sea: either the waves all move in the same direction, or the water stays still in a closed harbor, or the current suddenly changes direction. Naming the current state of your asset before placing even a single order means avoiding swimming against the current. This reading of the structure is the very first reflex taught in the JARVIS METHOD training.
What are trend, range, and reversal?
To understand the market, think of the weather. Either it's pouring rain in a specific direction, or the weather is stuck and flat, or the wind suddenly turns. Three states, three behaviors to adopt:
- The trend: it's a strong directional movement. The price advances like a rising wave (increasingly higher highs and lows) or a falling one (increasingly lower highs and lows). In an uptrend, every small dip is an observation point for anyone who wants to follow the movement.
- The range: it's a market with no clear direction, moving sideways. The price bounces between a ceiling (resistance: the highest price reached recently) and a floor (support: the lowest price). Imagine a ball bouncing between the floor and the ceiling of a room: neither gives way.
- The reversal: it's the pivotal moment when the trend runs out of steam and changes sides. The wave stops and starts again in the other direction. It's the trickiest state to identify, because you have to distinguish a simple setback from a real change of direction.
Why the market state determines your plan
Each state requires a different approach. Buying in the middle of a range hoping for a big breakout often leads to frustration. As explained in the complete training available on our site, reading the structure beforehand allows you to choose between a continuation scenario (following the movement) or a return to the mean (riding the bounces at the boundaries). In a range, the price is like an elastic band stretched between two boundaries: it naturally returns toward the center. In a trend, it moves forward like a train on its rails.
To refine this reading on a daily basis, the JARVIS METHOD indicator available on TradingView helps identify the short-term bias and spot the reference points suited to each market configuration. It comes with a position calculator and session and exchange markers: enough to frame your analysis without guessing. The details of how it works are reserved for members of the training, but its role is simple: to give you a clear framework for naming the market state before acting.
Let's take a concrete example. During an active European session, the CAC 40 index can trace a clear uptrend, chaining record prices. Conversely, in the afternoon, while waiting for Wall Street to open, the same index can lock into a narrow range, oscillating without conviction between two precise levels. Your way of analyzing the chart changes radically between these two moments. It is to support this diversity of situations that the member area offers progress tracking, an orientation test, and a trading journal: noting your observations over the sessions helps you recognize the market state more quickly.
Concrete example on the charts
Let's take a CAC 40 stock. For three weeks, it rises, pulls back a little, then rises higher: it's an uptrend. Each pullback stops higher than the previous one, like ascending stair steps. An investor who observes each small pullback uses the structure to their advantage: they know the trend remains valid as long as the lows keep rising.
Suddenly, the price stalls around €100 and drops back to €90 several times without going higher: a range sets in. The price is like a pendulum swinging between two walls. On €100 invested, the difference between the two boundaries represents about €10 of fluctuation margin. During this phase, buying at the ceiling and waiting for a breakout is like pushing a wall: disappointment is often the result.
Finally, if the price breaks the €90 floor with momentum and the highs struggle to form again, the reversal is confirmed. The market has changed sides. Be careful: a simple drop below the boundary is not always enough. False breakouts exist, and that's where reading the structure, taught in the JARVIS METHOD training, comes into its own. To deepen your reference points, the JARVIS METHOD indicator guide and the educational sheets available on the platform give you complementary keys, without ever replacing your own analysis.
Pitfalls to avoid
The first pitfall is confusing a pause in a trend with a reversal. An uptrend can stall for several sessions before resuming. The second pitfall is ignoring the session context: a tight range while waiting for an economic announcement may seem calm, but volatility can return abruptly. The third pitfall is approaching each state with the same plan. A protective stop that is too tight in a range, for example, will often be hit before the price moves back in the right direction.
To practice reading these states, the trading journal in the member area lets you record screenshots, the results of your observations, and a mini psychological test. Over time, you will develop a faster eye for naming the market state. Mindset coaching, which addresses discipline and emotional management, usefully complements this practice: staying calm in the face of a reversal requires as much work as technical analysis itself.
This content is purely educational and does not constitute investment advice in any way. Trading involves a risk of capital loss.