What does it mean that markets only trade two ways? Up and down? No, what we mean by markets only trade two ways is that they either trade in a consolidated pattern or a trending pattern
When markets are consolidating, this means they are trading within a price range. This generally means that traders and investors alike agree on the price and valuation of the security. This price agreement allows the security to trade within a defined range until a catalyst is introduced to change this equilibrium. The catalyst can be anything that has an impact on the valuation of the security such as a news item, change of earnings, economic data release, crop report data, shifting consumer sentiment, or anything else which then requires price discovery. Consolidating patterns can be described as price moving slowly throughout time and since the price is agreed upon, generally volume at price builds creating support and resistance levels. Using the Radar and Altimeter will reveal these levels of heavier volume at price and thus creating support and resistance levels.
When markets are trending, price is moving quickly through time as this is a time when traders and investors are seeking out price discovery. The price of the security is no longer agreed upon and the security will trend in an either up or down direction. These periods of trending are generally followed by a breakout or breakdown from a consolidating range. When a security is trending, it usually moves through an area with very little support or resistance. Support and resistance can be defined as areas with larger volume at price. Using the Radar and Altimeter, we can find these areas of support and resistance as well as holes where the price can move quickly through time thus breaking up or down.
Both of these patterns can be found with varying degrees of volatility in all time frames ranging from the shortest of periods such as 1-minute bars to longer periods like weekly or monthly charts.