Any indicator that tells when Choppy/Ranging starts/ends? | Forex Factory

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Any indicator that tells when Choppy/Ranging starts/ends?

  • #1
  • First Post: Aug 10, 2020 9:37am Aug 10, 2020 9:37am
Hi everyone. Still new (first 2 months) into forex. I'd like to know if there is any indicator that can be used to let us know when we have entered into a ranging period (sideways movement, choppy market, you name it! Basically the opposite of Trend)

I have a set of indicators and parameters that work well enough when the price is in trends but obviously not that good when we enter a ranging period. Is there some indicator or combination of indicators that can help me determine when a ranging period starts and when it ends so that I don't open orders during that period but wait instead for the next uptrend or downtrend?

Thanks in advance! Have a nice day everyone and stay safe!
  • #2
  • Aug 10, 2020 9:54am Aug 10, 2020 9:54am
Quoting johnwester
Hi everyone. Still new (first 2 months) into forex. I'd like to know if there is any indicator that can be used to let us know when we have entered into a ranging period (sideways movement, choppy market, you name it! Basically the opposite of Trend) I have a set of indicators and parameters that work well enough when the price is in trends but obviously not that good when we enter a ranging period. Is there some indicator or combination of indicators that can help me determine when a ranging period starts and when it ends so that I don't open orders...
Hi.
It takes a bit time in the beginning to spot quickly choppy markets.
Often they appear during the holiday season.

Quickly spotted with a 50 ema flat = choppy.

Hope that helped
Risiko birgt immer auch die Chance.
  • #3
  • Aug 10, 2020 10:05am Aug 10, 2020 10:05am
50 EMA isn't too big to catch a range? I thought I'd need something with smaller periods or more sensitive indicators? Maybe somehow through RSI or volume indicators like OBV?
  • #4
  • Aug 10, 2020 4:42pm Aug 10, 2020 4:42pm
Quoting johnwester
Hi everyone. Still new (first 2 months) into forex. I'd like to know if there is any indicator that can be used to let us know when we have entered into a ranging period (sideways movement, choppy market, you name it! Basically the opposite of Trend) I have a set of indicators and parameters that work well enough when the price is in trends but obviously not that good when we enter a ranging period. Is there some indicator or combination of indicators that can help me determine when a ranging period starts and when it ends so that I don't open orders...
Stop looking for a trade every single time you watch the chart, to be "always on" the market, learn to read the price, stop using third wheels, waiting for an indicator to tell you to enter the market and nothing else its just a crutch for losers and noobs alike, level up because this game its NOT played like that !!

OHLC.. its all there, put the effort to learn and do it right, or crash and burn slowly.. forever.. your choice
  • #5
  • Aug 11, 2020 1:55am Aug 11, 2020 1:55am
No need for indicators, I use price itself to tell me when consolidation period is likely finished
  • #6
  • Aug 11, 2020 12:51pm Aug 11, 2020 12:51pm
Quoting havo
{quote} Stop looking for a trade every single time you watch the chart, to be "always on" the market, learn to read the price, stop using third wheels, waiting for an indicator to tell you to enter the market and nothing else its just a crutch for losers and noobs alike, level up because this game its NOT played like that !! OHLC.. its all there, put the effort to learn and do it right, or crash and burn slowly.. forever.. your choice
that's exactly what I want too. I don't want to look for trades every single time and always trading. That's why I was asking for a way of noticing when price enters choppy period so as not to trade. I guess there can be noticed by OHLC and price action but I was wondering if it would work with an indicator as well so that I could easier program it on algorithmic.
  • #7
  • Aug 12, 2020 2:06pm Aug 12, 2020 2:06pm
A lot of traders avoid trading over the holidays. Much more likely to be choppy.
  • #8
  • Aug 12, 2020 2:25pm Aug 12, 2020 2:25pm
the chart is the best indicator...

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  • #9
  • Aug 12, 2020 2:46pm Aug 12, 2020 2:46pm
Quoting johnwester
Hi everyone. Still new (first 2 months) into forex. I'd like to know if there is any indicator that can be used to let us know when we have entered into a ranging period (sideways movement, choppy market, you name it! Basically the opposite of Trend) I have a set of indicators and parameters that work well enough when the price is in trends but obviously not that good when we enter a ranging period. Is there some indicator or combination of indicators that can help me determine when a ranging period starts and when it ends so that I don't open orders...
Are you new into Forex or trading? I can say stay away from indicators, except the price chart and volume, until you have studied and practised price action. It is better to use indicators when you understand price movement. It is very easy to identify a non-trending environment at the beginning of a trading range without any use of an indicator. You can study and practise the Wyckoff Method for this purpose. Note the Wyckoff Method is not the only method that can be used.
  • #10
  • Aug 12, 2020 11:41pm Aug 12, 2020 11:41pm
to detect ranging markets you can use ADX of course
but you can also try :
- when ATR is below a N-Period Moving Average then it's considered ranging.
- when RSI is outside OBOS zones (for example between 35 and 65)

cheers
  • #11
  • Edited Aug 14, 2020 4:07am Aug 13, 2020 10:33pm | Edited Aug 14, 2020 4:07am
Quoting havo
{quote} Stop looking for a trade every single time you watch the chart, to be "always on" the market, learn to read the price, stop using third wheels, waiting for an indicator to tell you to enter the market and nothing else its just a crutch for losers and noobs alike, level up because this game its NOT played like that !! OHLC.. its all there, put the effort to learn and do it right, or crash and burn slowly.. forever.. your choice
Ola Hugo,

how is OHLC relevant when we ignore time ? there is no constants against which we're measuring it.
basically my OHLC will be different from yours for same instrument. right ?

I'd love to see few of your charts and understand how you read them (can be shared via different site if you're not comfortable to share here).
merda taurorum animas conturbit
  • #12
  • Aug 13, 2020 10:59pm Aug 13, 2020 10:59pm
First, take the rectangle tool, make 100 of them on daily charts, group the congestion.

Next, go to 1 min charts, group 100 of them live.

There's no easy way of doing it, if it was easy like an indicator we will all use it to make money.

Oh, yes, I use a moving average to give intraday direction. And trends then congests, trends then congests.
  • #13
  • Aug 14, 2020 4:33am Aug 14, 2020 4:33am
I quite like putting a moving average (e.g. between 5 to 10 period) over the ATR. When ATR is above the MA suggests there is volume, when ATR is below there isn't (i.e. ranging)
  • #14
  • Aug 14, 2020 7:54am Aug 14, 2020 7:54am
On chart Bollinger Bands (Bollinger Squeeze)

and or

Standard Deviation With Very slow moving average .

Bollinger bands Is build with standard deviation.

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  • #15
  • Aug 14, 2020 8:44am Aug 14, 2020 8:44am
Quoting desifxtrader
{quote} Ola Hugo, how is OHLC relevant when we ignore time ? there is no constants against which we're measuring it.basically my OHLC will be different from yours for same instrument. right ? I'd love to see few of your charts and understand how you read them (can be shared via different site if you're not comfortable to share here).
Ignoring time and focusing on the price only its the best thing anyone can do to take a trading decision !!! time its no a "constant" (well, if you think that a fixed time interval its constant lol) Time introduces 100% random sized samples EVERY CANDLE and can make price analysis unnecessary complicated

and before anyone jumps on me, yes, you can perfectly read time charts BUT price only charts are simpler, more accurate and reliable, its just the way it is.. period
  • #16
  • Aug 14, 2020 11:00pm Aug 14, 2020 11:00pm
Quoting havo
{quote} Ignoring time and focusing on the price only its the best thing anyone can do to take a trading decision !!! time its no a "constant" (well, if you think that a fixed time interval its constant lol) Time introduces 100% random sized samples EVERY CANDLE and can make price analysis unnecessary complicated and before anyone jumps on me, yes, you can perfectly read time charts BUT price only charts are simpler, more accurate and reliable, its just the way it is.. period
Thanks for the clarification.
A small request, please share your chart breakdown / how to read ohlc. (can be shared via different site if you're not comfortable to share here).
Maybe record few youtube videos to show how you break it down. it'll be really helpful for people struggling in misinformation to search for a reliable path.

Again, thanks for your time and guidance.
merda taurorum animas conturbit
  • #17
  • Aug 15, 2020 1:15am Aug 15, 2020 1:15am
The problem here is that almost any indicator lags, so whenever it gives a clue it's too late in many cases. There are also indicators based on digital filters, that save you some lag but they repaint a lot and give false signals, but if you know how to use them they're still better than MA's, BB's, and related. I think the best way is to train the eye and (with some help) see where the important levels are (if you take a bigger timeframe and see a good level and price goes there, it will probably stay there for some time forming a range in a smaller timeframe).
  • #18
  • Aug 15, 2020 2:33am Aug 15, 2020 2:33am
Quoting idontknow
The problem here is that almost any indicator lags, so whenever it gives a clue it's too late in many cases. There are also indicators based on digital filters, that save you some lag but they repaint a lot and give false signals, but if you know how to use them they're still better than MA's, BB's, and related. I think the best way is to train the eye and (with some help) see where the important levels are (if you take a bigger timeframe and see a good level and price goes there, it will probably stay there for some time forming a range in a smaller...
yeah the problem with lagging indicators, is that you're always late. One could argue that you need to use bigger periods then, but the delay is bigger with the higher period, so it's not the solution. I think MAs are useless used isolated, and even Adaptive MAs are useless.
but I would argue that not all indicators are lagging, it depends on the internal computation
some indis like RSI don't lag because of how they are built, it doesn't mean it will be profitable on its own, but it's reactive
  • #19
  • Aug 15, 2020 7:29am Aug 15, 2020 7:29am
Quoting ionone
{quote} yeah the problem with lagging indicators, is that you're always late. One could argue that you need to use bigger periods then, but the delay is bigger with the higher period, so it's not the solution. I think MAs are useless used isolated, and even Adaptive MAs are useless. but I would argue that not all indicators are lagging, it depends on the internal computation some indis like RSI don't lag because of how they are built, it doesn't mean it will be profitable on its own, but it's reactive
Of course there are indicators that doesn't lag and doesn't repaint, but I was focusing in the ones that detect a start/end of a range/trend, and the problem is in the relation of lag/reactivity you want (for example if you have a 300 bars trend you'll need more bars to detect a change to a range than other smaller trends, maybe there is a sweet point). I still think that it's very difficult to obtain consistent live good signals from any conventional indicator.
  • #20
  • Aug 15, 2020 7:42am Aug 15, 2020 7:42am
Quoting idontknow
{quote} Of course there are indicators that doesn't lag and doesn't repaint, but I was focusing in the ones that detect a start/end of a range/trend, and the problem is in the relation of lag/reactivity you want (for example if you have a 300 bars trend you'll need more bars to detect a change to a range than other smaller trends, maybe there is a sweet point). I still think that it's very difficult to obtain consistent live good signals from any conventional indicator.
I don't think it's possible to detect trends as soon as they begin, because price can go in the other direction any moment...how do you know it's the reversal time ? there is no way to know. Also to detect a trend you need some kind of reversal, at least one bar, otherwise how can you know it's reversing ? it can continue in the same direction if there is no reversal. So one bar reversal can signal the beginning of a trend, but the price can also revert one bar, and then go back in the wrong direction. Only thing you can do is minimize the loss when this happens
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