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State
Definition
State
The current behavioral classification of the market at a specific timeframe. Three named states: directional, balanced, and transitional.
Full Explanation
State is always timeframe-specific. A market can be in a directional state on the higher timeframe and a balanced state on the trading timeframe simultaneously. State describes the present — it is not a prediction of the future. When naming a state, always name the timeframe it belongs to. The three states — directional, balanced, and transitional — are exhaustive. Every stretch of chart falls into one of them, and when the answer is not clearly one, that ambiguity is itself the answer: the market is not giving a clean read at that scale right now.
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Chapter 13 · Reading the Current Market
The Three States
This chapter is part of the full book. Get access to read the complete explanation in context.