Identifying Ranging Markets

Hello Everybody,

maybe one or two of you have the same problem as I have.
You are sitting there, the Vola and ADX are dropping and you are awaiting a breakout. And there is it, ADX and Vola are rising, after a while you get your signals from your whatever-system and then, soon afterwards the breakout is dieing away. The market begins to rang !
You got into your position on the outer rims of the range, darting towards the outside (as you will reckognize after several days when you can draw trendlines over the peaks and bottoms).

For me this game happens over and over again. Getting into positions darting in the wrong direction in a ranging market.
And so I would like to know how you great traders cope with this problem.

When do you reckognize a ranging market.

How you reckognize a ranging market.

When you consider a ranging market as broken.

It would be great if some of you could help me with this questions. I think answers to them would be helpfull for many newbys.

Kind Regards, Mike

Not sure what you mean by when, I draw my support and resistance lines (sideways channel) and wait for price to come to me.
When price bounces up and down between these S&R lines I'm thinking range bound. I'll look at my Bollinger Bands and it appears relatively horizontal my Moving Averages are flat or braiding not showing any clear direction.
I look to see that the candle has closed outside the channel (sometimes more than one candle) or for price to retest and confirm support has become resistance or resistance has become support and my MAs start to head in a certain direction.

Here's part of my secret. If the MACD narrows on the 15 min chart then the range is very narrow. Look particularly on the histogram. Does it narrow around the zero line. Research the MACD and know it inside out and you will understand this price action. This works well in the major pairs during the London, US and Asian sessions. Break your sessions into timeframes because this condition may only last half of the session.

Over the summer months (May through August) i heard over and over that the market was "Range Bound" by many of the top analysts, that there were "No trades to be taken"...

All the while the small group of traders that are fellow members of one of the mentorship groups i'm involved with were trading off their model that calls for 30m charts. There was rarely a day that did not go by when the 30m model did not signal a good entry. And these trades would go for 55 to 200 pips even during the doldrums...

My point in all this is i think "Ranging" is relative to some degree. One can nearly always find a trend on one intraday time frame or another when the daily chart is stuck in a 200-300 pip "Range".

The other way to look at the situation is become comfortable with a trading model that works on Price Action with certain breakout candle formations such as Engulfing candle at prior S/R. Some of these models can be quite profitable and then one does not have to shift gears/models when market changes it's mood.

: ) Thom

I use adx with ichimoku and cci to confirm trends as well as make price entries.
it has kept me from making bad entries.

also, in case you aren't , zoom all the way out instead of being zoomed in. it's easier to see what the market is doing.

i used to be zoomed in and now that i zoom out you see a different picture. zooming in, you'll always see some sort of buy or sell signal.

Is there a solution to identify ranging markets at least 60% -70% of the time?

At the moment i'm using ADX, it does ok, but there has to be something better, maybe bollinger bands or just looking price it self.

My strategies are heavily MA Crossover based, but when the pairs are constantly crossing backwards and forwards (so called ranging or tanking non-trending markets), a lot of small losses really wears away at the big move gains. (Can be 30% of trades in a month.)

I too found a solution using MACD, as mentioned above.

Take the last 100 bars values of MACD (Main or Signal - doesn't really matter) and average them out - if it's below a certain level, then the market isn't trending enough to warrant a trade.

A value of about 0.001000 over 100 bars (on M5 timescale) seems to be a good (recent) starting point, but fine tune it to your own needs.

[If the MACD is hopping from low negative to low positive, then the average of these will really be low, hopefully under the threshold where your software can say 'No trade'.]

Cutting out trades that are a waste of time save money.

I am still tuning my own values, (other values/ccy pairs/timescales/100 bars/200 bars/fast/slow/SMA etc) but it's working well enough.

Every duff trade saved ...

Todge.

Old thread.

But uhhhh, what's so hard and what's with all those fancy indicators? If price is repeatedly moving back and forth between a particular area...it's ranging. If it's moving up or down for a length of time...it's trending.

Hi guys, where can I get a ocnsistent reliable fundamental news everytime?

I think MSNBC, FOX NEWS, ETC seem to be lack of focus in getting forex news. What do you think about it?

Just want to know where is a good place for it (fundamental news)?

-please don't answer forex factory news announcement, I knew it already. =)