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lacika Oct 5, 2006 4:39am | Post# 1

"Ranging Strategy"
 
"Ranging Strategy"
Is here Somebody who use something like this?
Or can Some body show me threads in this topic?
THX,
NL

Typruss Oct 5, 2006 6:20pm | Post# 2

"Ranging Strategy"
Is here Somebody who use something like this?
Or can Some body show me threads in this topic?
THX,
NL
lacika, There are some who use Ranging strategies, I myself is one, but the most common say 95% use a Trend strategy. That is why you won't find very many threads on the subject.

Bemac Oct 5, 2006 6:27pm | Post# 3

lacika, There are some who use Ranging strategies, I myself is one, but the most common say 95% use a Trend strategy. That is why you won't find very many threads on the subject.
Ahh Typruss,

Soon you will realize that a Trend is also a Range.

Personally I prefer to watch for the {Trend/Range} break to enter but that's only due to how long I am personally comfortable staying in a trade.

Typruss Oct 5, 2006 6:34pm | Post# 4

You are correct Bemac in the long run. I believe most people when you say "range" they are thinking in smaller time frames. But to each his own.



Ahh Typruss,

Soon you will realize that a Trend is also a Range.

Personally I prefer to watch for the {Trend/Range} break to enter but that's only due to how long I am personally comfortable staying in a trade.

lacika Oct 6, 2006 4:58am | Post# 5

I did not mean just the shorter timeframes.Just curios about "RANGE" trading techniques, and experiences.

NL

hiachiever Oct 6, 2006 7:39pm | Post# 6

Ranging Method
 
Hi Lacika,

This is a topic that I have spent some time thinking about over for quite some time. The reason is that in my view a trading approach should be multi dimensional. That is you should have a strategy for trading trending markets, and one for ranging markets. The key and major hurdle is coming up with a robust way of defining trending and ranging.

Like a number of others I have a couple of strategies for trading trending markets, and like most they are based on price action and moving averages.

However for ranging markets I have taken one of Joe Ross's setups called a 'Gimme bar'. A quick search on Google will unveil heaps of good reading. But in basic essence this setup is simply to trade a bounce off the upper or lower bollinger bands when price is ranging.

To help me determine when price is ranging or trending I have developed my own indicator called TrendStrength, which based on RSI. The code for this is:
TrendStrength:=EMA(RSI(21),3)-50;

In an easy language desciption it is simply a 21 period RSI that is smoothed and centred around zero.

The way to use this indicator is as follows:
1. When TS is between 10 and -10 price is ranging.
2a. When TS is between 10 and 20 it is trending.
2b. When TS is between -10 and - 20 it is trending.
3. When TS is greater than 20 it is overbought, or less than -20 it is oversold. (Look for divergence trades in this mode)

Now for this setup the first condition is the one that we use. If Price is at the upper BB and TS is between 10 and -10 then we should be looking for a short entry and vice versa.

As they say a picture is worth a thousand words, so here are some great examples of this setup earlier in the year with the Daily Euro.



As a side note if the TS is between 10 and 20 or -10 and -20 (ie trending), and the price pulls back below the 5 period Weighted moving average (dark blue line), and then cross back above it. Then these are very low risk, high probability trades.

Cheers,
Hiachiever


hiachiever Oct 6, 2006 7:43pm | Post# 7

Euro Chart
 
1 Attachment(s)
Euro Chart, didn't post first time, so here it is.
Name:  EURDaily.gif
Views: 8165
Size:  56 KB

Achilles heel Oct 6, 2006 8:07pm | Post# 8

Hi Hiachiever,

Just wondering if you could point me towards more info on the gimme bar, I did a google search on it but didnt find anything.

Thanks for your help.

Best regards,
Ah.

sovo1970 Oct 6, 2006 8:12pm | Post# 9

Hi Hiachiever,

Just wondering if you could point me towards more info on the gimme bar, I did a google search on it but didnt find anything.

Thanks for your help.

Best regards,
Ah.
maybe if you google under Joe Ross

forex4syg Oct 7, 2006 12:39am | Post# 10

Hi Lacika,

This is a topic that I have spent some time thinking about over for quite some time. The reason is that in my view a trading approach should be multi dimensional. That is you should have a strategy for trading trending markets, and one for ranging markets. The key and major hurdle is coming up with a robust way of defining trending and ranging.

Like a number of others I have a couple of strategies for trading trending markets, and like most they are based on price action and moving averages.

However for ranging markets I have taken one of Joe Ross's setups called a 'Gimme bar'. A quick search on Google will unveil heaps of good reading. But in basic essence this setup is simply to trade a bounce off the upper or lower bollinger bands when price is ranging.

To help me determine when price is ranging or trending I have developed my own indicator called TrendStrength, which based on RSI. The code for this is:
TrendStrength:=EMA(RSI(21),3)-50;

In an easy language desciption it is simply a 21 period RSI that is smoothed and centred around zero.

The way to use this indicator is as follows:
1. When TS is between 10 and -10 price is ranging.
2a. When TS is between 10 and 20 it is trending.
2b. When TS is between -10 and - 20 it is trending.
3. When TS is greater than 20 it is overbought, or less than -20 it is oversold. (Look for divergence trades in this mode)

Now for this setup the first condition is the one that we use. If Price is at the upper BB and TS is between 10 and -10 then we should be looking for a short entry and vice versa.

As they say a picture is worth a thousand words, so here are some great examples of this setup earlier in the year with the Daily Euro.



As a side note if the TS is between 10 and 20 or -10 and -20 (ie trending), and the price pulls back below the 5 period Weighted moving average (dark blue line), and then cross back above it. Then these are very low risk, high probability trades.

Cheers,
Hiachiever

Hi Hiachiever,
I am not clear how to calculate the TrendStrength in MT4. Do you know how to calcuate your indicator's value in MQ4?

The following site also has an indicatore called TrendStrength, but it is not the same as yours. Not very sure how to use it.

http://strategybuilderfx.com/showthr...hybrid&t=16356

Thanks!

Forex4syg

hiachiever Oct 7, 2006 6:22pm | Post# 11

Trend Strength
 
Hi Forex4syg,

The indicator I have called trend strength is nothing more than a very slight modified RSI (ie 3 period smoothing applied), and zero centred (ie instead of being 0-100, it is
-50 to 50).

So if like me you are unable to code in Metatrader 4, then simply apply a 21 period RSI to chart (smoothing isn't a 100% necessary), and use the following values.

Not Trending 40-60
Up Trend: 60 to 70
Down Trend: 30 to 40
Over Bought: greater than 70
Over Sold: less than 30

There is nothing new about any of this, all I have tried to do is definitively define when certain entries should be looked at, and when certain entries should be avoided.

Cheers,
Hiachiever


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