In some cases, you will see quite clearly the boundaries of a sideways market. These boundaries are called support and resistance.
In this picture, the blue line is the support, which is a level of buying pressure due to heavy demand. The red is the resistance, a level of selling pressure due to abundance of supply. A basic trading concept for this type of market is to buy at support and sell at resistance. Be careful though, support and resistance levels eventually break, but there is a strategy for that too, as we will see later.
Sometimes, when a support line is broken it can become resistance later, and vice versa; when a resistance line is broken it can become support. Note the reversal of roles for the levels highlighted in grey.
Support and resistance exist not only in sideways markets, but also in trending markets. When they are rising or declining, they are call trendlines.
When price movements are held within parallel trendlines, a channel is formed:
The trading concept of buying at support and selling at resistance also applies to trading within a rising or declining channel. However, it is probably more prudent to follow the trend ie. buy at support trendline in rising channel, sell at resistance trendline in declining channel.
Here is another example of drawing a channel to project resistance and support trendline:
The concept of support and resistance switching roles once broken can apply to trendlines as well. These are sometimes referred to as powerlines.