How to determine a ranging market (for EA, indicators) | Forex Factory

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How to determine a ranging market (for EA, indicators)

  • #1
  • First Post: Jun 23, 2011 10:57pm Jun 23, 2011 10:57pm
When coding expert advisors or indicators, you sometimes have to determine wheter the market is trending/ranging or not.

What is your way to do that?

When using a single moving average (e.g. SMA 200) you get the main direction of the market (maybe you will look to the higher timeframes also).

When using the RSI (current/higher timeframe), you know the current value, but you donnot know if there is the market is ranging in the timeframe you are trading in.

Eg. at chfjpy - in the 1 hourchart (4H and so on) we have an uptrend. But in the 5M and 15M chart we have got a quite ranging market.

When trading (not scalping) in that timeframes we maybe would have lost money.

So, what is your method to determine what is going on?
Do you use the adx for example (higher timeframe), do you compare the difference between upper/lower bollingerband in current/higher timeframe or do you use some other method (maybe atr?)?
PM me with coding requests and I'll probably put you on my ignore list
  • #2
  • Jun 23, 2011 11:02pm Jun 23, 2011 11:02pm
I usually yodel.
  • #3
  • Edited 11:42pm Jun 23, 2011 11:28pm | Edited 11:42pm
Well as a basic concept you can use the ADX and the DI's to help.

ADX and DI < 25 = Ranging
ADX and DI > than 25 = Trending

I tend to use the ADX on the H1 as the basic guide and then use the M5 ADX as the trigger

Lots of stuff on the ADX on the net....google is your friend. If you are looking for comprehensive book try ADXcellence - Dr. Charles Schaap.

The definition of the trend(for the EA) is also dependent on the nature of the EA....if you are looking for a short term trade with then looking at times frames higher than 1H may reduce the opportunities while not increasing the sucess probability of the trade.
  • #4
  • Jun 23, 2011 11:34pm Jun 23, 2011 11:34pm
Thanks, yes, actually I am using the adx the most times (e.g. http://www.forexfactory.com/showthre...94#post4712494 ), and/or the RSI (look for OS/OB or >< triggerValue in different timeframes).

I wonder if there are more (also reliable) methods.
PM me with coding requests and I'll probably put you on my ignore list
  • #5
  • Jun 23, 2011 11:42pm Jun 23, 2011 11:42pm
You can also couple this with an EMA angle requirement. For example....a greater than 20 degree(eyeballing...tho there are indicators MA_Angle) angle of a 21EMA on the M15 might be a good indicator of market momentum.Search Phillip Neil 5M stratagey to see more on the EMA angle. Also look at the Choros thread"
  • #6
  • Jun 23, 2011 11:53pm Jun 23, 2011 11:53pm
Quoting Cypr3ss
Search Phillip Neil 5M stratagey to see more on the EMA angle. Also look at the Choros thread"
Sounds interesting.
I guess you mean that treads?
Phillip Nel: Pillip Nel's 5M intrady system
Kostas1: Choros System
PM me with coding requests and I'll probably put you on my ignore list
  • #7
  • Jun 23, 2011 11:58pm Jun 23, 2011 11:58pm
I gave that smart-ass post because there is absolutely NO WAY a retail trader can know the market is doing.... only what has just happened. In other words, trends start and stop randomly within choppiness.... You can't time that.

Cheers.
  • #8
  • Jun 24, 2011 12:58am Jun 24, 2011 12:58am
Quote
Do you use the adx for example (higher timeframe), do you compare the difference between upper/lower bollingerband in current/higher timeframe or do you use some other method (maybe atr?)?

I have tried using the width of the Bollinger Bands and whether they are level. But like all indicators, it lags and gets fooled from time to time.

  • #9
  • Jun 24, 2011 6:40am Jun 24, 2011 6:40am
Keep a log on the pairs you follow and trade... when the daily bars or candles begin to contract or print small ranges... large ranges are due. Expect this phenomenon to repeat in all timeframes.

GLGT
  • #10
  • Sep 18, 2011 3:08pm Sep 18, 2011 3:08pm
To complete that thread here, I found an indicator coded by Gopal Krishan Doda. The indicator uses the atr and standard deviation.

Quote
We all know how boring and frustrating is when we enter a market and after that it remains sideways i.e. with no clear trend. And above all, if the price goes opposite to your call.
(...)
Please note that this indicator ONLY shows whether the market is sideways or trending. It does NOT show whether the trend is UP or Down. For getting buy or sell signals, I recommend to use Doda-Donchian indicator.
(source and download the indicator here at mql4.com)

If you do not want to download the indicator or want to use own code, you may try my piece of code, feel free to change it if you want:

Inserted Code
 
//+------------------------------------------------------------------+
//| function checkAtrStdTrending                                     |
//+------------------------------------------------------------------+
// returns true if market is trending, false if market is ranging
// from an idea by Gopal Krishan Doda, source: [url]http://codebase.mql4.com/7153[/url]
bool checkAtrStdTrending(string symbol,int timeFrame,int atrStdPeriod,int stdEmaPeriod,int shift)
 {
  double atrVal = iATR(symbol,timeFrame,atrStdPeriod,shift);
  double stdVal = iStdDev(symbol,timeFrame,stdEmaPeriod,0,MODE_EMA,PRICE_CLOSE,shift);
  if (atrVal > stdVal) return(false); //"RANGING";
   else if (atrVal < stdVal) return(true); //"TRENDING";
    else return(false);
 }
PM me with coding requests and I'll probably put you on my ignore list
  • #11
  • Dec 15, 2013 3:36am Dec 15, 2013 3:36am
quick update:

another option could be the use of the volatmeter bei damiani (damiani volatmeter v3.2), find it (with alerts) at http://www.forexfactory.com/showthre...54#post7156654
PM me with coding requests and I'll probably put you on my ignore list
  • #12
  • Aug 16, 2016 11:02am Aug 16, 2016 11:02am
Quoting fxdaytrader_
quick update: another option could be the use of the volatmeter bei damiani (damiani volatmeter v3.2), find it (with alerts) at http://www.forexfactory.com/showthre...54#post7156654
Sir, i come to this thread after googling 'ranging market forexfactory'.

Many indicators i've come around in my search.

  1. NPCP chop free.
  2. Wilder's ADX.
  3. Aroon oscillator.
  4. Donchian Channel.
  5. Bandwidth Bollinger.
  6. ATR.
  7. Fractal high-low range.
  8. Damiani voltmeter.
  9. Stochastic oscillator.

Can you explain which one capture your interests the most? And can you explain a little bit about the parameters in damiani?

  • #13
  • Sep 23, 2016 3:07pm Sep 23, 2016 3:07pm
Quoting fxdaytrader_
To complete that thread here, I found an indicator coded by Gopal Krishan Doda. The indicator uses the atr and standard deviation. {quote} (source and download the indicator here at mql4.com) If you do not want to download the indicator or want to use own code, you may try my piece of code, feel free to change it if you want: //+------------------------------------------------------------------+ //| function checkAtrStdTrending | //+------------------------------------------------------------------+ //...
Hi,

Whats the best Period to ATR and StdDev to know if the marketing is Ranging?

Tks
  • #14
  • Last Post: Mar 10, 2025 5:28am Mar 10, 2025 5:28am
H4 Period is the best period to look for ranging markets. H1 can change any time and very choppy, D1 is too long of a period. Many things can happen in a day.
Alternatively try Heiken Ashi candle with wicks both sides on H4 or D1
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