Core Logic: A sideways market indicates a stalemate between bulls and bears; the key to price movements lies in the direction of the breakout and volume support. A single sideways movement without signals is inconclusive; only a break confirms the trend.

1. First, look at the core premise of the sideways movement (defining the broader environment)

• High-level sideways: High probability of weak oscillation, with a greater chance of a downward breakout (profit-taking is likely to occur).

• Low-level sideways: High probability of a strong bottom formation, with a greater chance of an upward breakout (selling pressure has been exhausted).

2. Key judgment signals (the most practical 3 points)

(1) Validity of breakout/breakdown (the core of the core)

• Valid breakout: Closing price above the upper edge of the sideways range, and 1-2 consecutive candles do not fall back; bullish outlook is prioritized.

• Valid breakdown: Closing price below the lower edge of the sideways range, and 1-2 consecutive candles do not rebound; bearish outlook is prioritized.

• Invalid false breakout: A brief penetration followed by an immediate return to the sideways range; ignore this and continue to observe.

(2) Volume must match (to exclude false breakouts)

• Breakout: Must have increased volume (trading volume is more than 30% higher than usual); reliable only if both price and volume rise together; a breakout on low volume is likely to retrace.

• Breakdown: A breakdown with high volume is more stable; a breakdown on low volume may be a trap, with a subsequent easy rebound back to the sideways range.

(3) Auxiliary indicators (simplified with just 2)

• RSI (Relative Strength Index): When sideways, RSI above 70 → bearish; below 30 → bullish; divergences during breakouts are more accurate.

• Bollinger Bands: When sideways, the Bollinger Bands narrow; the direction of the opening = subsequent trend direction; an upward opening indicates a rise, while a downward opening indicates a fall.

3. Practical reminders (key to avoiding pitfalls)

• Do not guess the direction in advance: During sideways movement, keep light or no positions; wait for a clear breakout before entering the market to reduce oscillation stop-losses.

• Set stop-loss properly: After a breakout, set the stop-loss at the sideways range.