Sideways Market / Sideways Drift


DEFINITION of 'Sideways Market / Sideways Drift'

A sideways market occurs where the price trend of a certain trading instrument, such as a stock, has been experiencing neither an uptrend nor a downtrend. Instead, the price activity has been oscillating between a relatively narrow range without forming any distinct trends. A sideways market is said to be trading in a horizontal range or channel, with neither the bears nor the bulls taking control of prices.

BREAKING DOWN 'Sideways Market / Sideways Drift'

Market participants can exploit a sideways market by anticipating breakouts, either above or below the channel formed during the sideways market. Sideways markets are also referred to as choppy or non-trending. If the sideways drift is expected to remain for a long period of time, investor can earn profits by selling options with approaching expiration dates.

  1. Market

    A medium allowing buyers and sellers of a specific good or service ...
  2. Dull Market

    A market where there is little activity. A dull market consists ...
  3. Trend

    The general direction of a market or of the price of an asset. ...
  4. Countertrend Strategy

    A trading strategy where an investor attempts to make small gains ...
  5. Choppy Market

    A stock market condition whereby prices swing up and down considerably ...
  6. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
Related Articles
  1. Active Trading Fundamentals

    Finding Value In A Sideways Market

    When the market is non-directional, your profit potential need not go sideways too.
  2. Investing Basics

    Investment Strategies For Volatile Markets

    Read on to learn some investment strategies when the volatility is high.
  3. Trading Strategies

    Simple Strategies For Capitalizing On Trends

    Find out how following a trendline bounce or a new swing high or low can help you get into a trend early.
  4. Chart Advisor

    4 European Stocks to Consider Buying

    European companies, listed on US exchanges, that are providing buying opportunities right now.
  5. Professionals

    Top 5 Highest Paid Hedge Fund Managers

    Understand what a hedge fund is and why hedge fund managers make so much money. Learn about the top 5 highest paid hedge fund managers.
  6. Investing Basics

    6 Reasons Hedge Funds Underperform

    Understand the hedge fund industry and why it has grown exponentially since 1995. Learn about the top six reasons why the industry underperforms.
  7. Investing Basics

    What Does Plain Vanilla Mean?

    Plain vanilla is a term used in investing to describe the most basic types of financial instruments.
  8. Chart Advisor

    ChartAdvisor for October 2 2015

    Weekly technical summary of the major U.S. indexes.
  9. Investing

    How Diversifying Can Help You Manage Market Mayhem

    The recent market volatility, while not unexpected, has certainly been hard for any investor to digest.
  10. Options & Futures

    Pick 401(k) Assets Like A Pro

    Professionals choose the options available to you in your plan, making your decisions easier.
  1. Do options make more sense during bull or bear markets?

    Options and various option strategies can be used in bull and bear markets. Certain option strategies can be used to profit ... Read Full Answer >>
  2. How do I build a profitable strategy when spotting an Triple Top pattern?

    The triple top is a highly reliable and relatively complex chart pattern. Creating a profitable trade strategy is simple ... Read Full Answer >>
  3. What licenses does a hedge fund manager need to have?

    A hedge fund manager does not necessarily need any specific license to operate a fund, but depending on the type of investments ... Read Full Answer >>
  4. What do hedge fund analysts do?

    A hedge fund analyst primarily provides support to a portfolio manager on how to best structure the hedge fund's investment ... Read Full Answer >>
  5. Can mutual funds invest in hedge funds?

    Mutual funds are legally allowed to invest in hedge funds. However, hedge funds and mutual funds have striking differences ... Read Full Answer >>
  6. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!