In a strong bull trend, the first reversal attempt usually fails.
Bears often need more than one attempt before they can create a meaningful reversal.

That is why traders should avoid shorting too early just because the market looks overextended.
A strong trend can stay above the EMA much longer than expected.

Instead, bulls can be patient and look to buy lower, especially near the EMA20.
Using small initial size and scaling in lower can improve the average entry price and increase the probability of getting back to break-even if the pullback becomes deeper.

As long as the market continues to make higher lows and the pullbacks remain weak, traders should assume the bulls are still in control.

ETH is trading in the middle of a wide trading range on the daily chart.

Most breakout attempts inside the center of a range tend to fail.
There is not enough edge for swing traders to aggressively buy or sell here.

Professional traders usually prefer:

* Buying near the bottom of the range
* Selling near the top of the range
* Avoiding new positions in the middle

The current location is around the equilibrium area of the range.
That often leads to:

* Overlapping candles
* Weak follow-through
* Two-sided trading
* Increased disappointment

For bears, selling in the middle of the range is not ideal for a swing trade because the reward-to-risk ratio is poor.

However, short-term scalpers can still look for:

* Small pullback shorts
* Quick profits
* Mean reversion moves

The recent selloff from the upper part of the range increases the chance of a test toward the middle or lower half of the range.

Unless bears can create:

* consecutive strong bear bars,
* closes near the lows,
* and a breakout below the range,

this market is still more likely behaving as a trading range rather than the start of a strong bear trend.

In trading ranges:

* Breakouts often fail
* Reversals are common
* Taking quick profits is usually better than holding for large swings

A trader should be patient and wait for price to reach:

* support near the bottom of the range,
* or resistance near the top,

before looking for higher probability setups.

Yesterday, I suggested buy XAUUSD around 4534.

The market continued lower afterward, but in a trading range, traders can start with a smaller initial position and scale in at lower prices.

When the market eventually rebounds, the average entry price improves, allowing traders to exit around break-even instead of taking a full loss.

This is one of the key characteristics of trading ranges:
price often gives traders a second chance to reduce risk or exit flat after an adverse move.

However, this approach requires:

* small initial size
* controlled risk exposure
* enough room to scale in
* and the discipline to avoid averaging down in a strong trend

In a trading range, buying lower can improve the probability of reaching break-even.
In a strong bear trend, averaging down can become very dangerous.