Can you profit in a ranging market?

[Strikersipk]

I've had success swing trading trends by using a couple moving averages, multiple time frames, and price action.

Within the past couple months, I've had more time in my hands so I've been developing an intraday momentum system utilizing multiple timeframes and heiken ashi.

Once it comes to intraday trading (strictly 8-12 EST for momentum) I've discovered that the most important issue is to find out the climate of the market. A momentum system will probably get killed in a ranging market and vice versa. Eur/Usd appears to range between 1pm EST and 6pm EST

I trade eur/usd, therefore for example pretend that during the London session, there was lots of good news, then during US there's lots of bad news. Now we've got the components for strong bullish momentum (does not mean you'll get it sometimes it will be reverse). Days with less news appear to range more.

Now is one of those days which hasn't had any news.

To develop a trading plan for ranging days I'll need these things:

1) How can I determine if the market is ranging or trending?
2) If that range, How can I determine where/when/which management to enter?

For 1, I could examine the news which has come out during London and the news which will come out during the US session.

Next I can pop some bollinger bands to confirm that the market is ranging.

As well as those two things I can use my brain and appear at exactly what price was performing as it means that the latest turning point.

For 2, Maybe RNs, Pivots, S/R from a higher time period, and extremes of the BB can be my hint to where.

When is a interesting question for me. I love MTF, but I am not certain how it fits in yet.

I enjoy the idea of using price action to determine entry but I am worried that there will not be enough profit margin should I determine my range on exactly the same time period that I take my entrance. If I am using a 5M for my own range and a 1M for my own entrance, is price action on 1M even reliable ? (of course I'll need to answer all these questions over the years I am just putting them here for future reference)

I am curious about stochs in scenarios such as this.

I don't have any difficulty using indiors, but I am wary of taking buy/sell signs from them. I'd probably just use stochs to feel good about my PA entrance.

Ok so the entire time I've been typing this I've noticed a couple potential transactions.

Now was a no-news day, and for the previous 2 1/2 hours (because the market opened) we have been stuck at a 30 pip range.

[Strikersipk]

Of course I wouldn't have taken all these, but this is just an illuion of patterns I might look for using candles that are occurring at this time.

This is precisely the identical PA as the last chart, only zoomed in. On the other side of the chart you will notice a black vertical line, it is the same line from the other chart showing NY available at 8am.

A is an imperfect PB. A this point you could sustpect the tendency in London to still be in tact, the tendency was down.

B is another imperfect PB except this one is at service, oversold, and at the lower BB. This looks like the ideal commerce on the chart to me personally.

C is a dual high lower close/inside pub. It isn't at an ideal loion, probably would have been a non-trader.

D is an outside bar.

E is a bad trap pub at service.

Look between B and E at service, there is a nice trap pub I forgot to ring at service.

A, C, and D all occurred around RN xx50. I'm not sure how important this ought to be at this point.
https://www.cliqforex.com/attachments/15286980362102414461.jpg

[Strikersipk]

I enjoy price action but with this little time frame I am not ruling out indiors.

What if I set up a 5M along with a 30sec or 1M.

I could get my range from the 5M (along with SR from the 1H) and take entry signals from the 1M.

Who knows what sort of entry signals. If price action isn't very reliable at this TF (that, it is important to notice, could no be an accurate statement), then I am not over using indiors here, I suppose. It doesn't seem appropriate to take buy/sell from indiors, but perhaps on a limited time frame in a range with MTF it may be okay. Only time will tell.

Ok so lets say I've determined that it is a range and we are at the base of the range. I could change to the 1M or even 30S and search for multiple indior buy signals. Who knows PSAR and MACD haha. It just doesn't look appropriate but I will observe it and see what happens.

[Strikersipk]

Here is an example of what I mean with an indior based trade.

It's the Identical PA from this morning .

On the 5M price pokes from this BB and can be oversold.

On the 30S, the 5 EMA crosses the 12 EMA.

If you're targeting the middle BB that's 10 pips from your cross -2 pips from entry/exit so that's 8 pips, and realistically speaking that you might have expected 5-8 pips from that. Who knows what kind of stop you'd use, still another thing I'll have to iron out with time.
https://www.cliqforex.com/attachments/15286980391893506843.jpg

[santim93]

Hey, came from additional thread-
Have also been observing this range, it is unusually isn't it to the eur/usd at this time of day??

I would use a tight SL (4 pips ish) for that commerce because a range channel usually has nicely defined and firm edges so if it breaks by greater than 4 pips it is likely to be due to a break out that could move fast and lilely not come back in the channel for profit atall or until a sizable pip move away.

With that said, you might want to look at the underlying trend and base SL on that. If there's a good up trend on the 5m chart then the range could be seen as consolidation prior to a further move north. If so, buying into a pub in the bottom of the range could be regarded as more likely to wind up in profit compared to selling a pub at the top of the same range. Therefore a 4pip stop for a market and a 10pip stop for a buy in a range with positive bigger TF trend support could be the type of idea? Or just take positions in range stations in direction of undelying fashion in anticipation of a range break out?

[Strikersipk]

Hey, came over from other thread-
Have also been observing this range, it's unusually is not it for the eur/usd now of day??

I would utilize a tight SL (4 pips ish) for that commerce because a range channel usually has well defined and company edges so in case it breaks by greater than 4 pips it's very likely to be because of a break out that could move quickly and lilely not come back in the channel for profit atall or before a large pip go away.

With that said, you might want to look at the underlying trend and foundation SL on that. When there is a good up tendency... Wow than you really much for that remark friend.

I'll take note of this in the future.

I especially like the concept of buying in a longer term up trend, anticipating a breakout.

I believe 1/2 off the table and stop to break even could be the answer. If I end up with a decent%Win I have no trouble holding a position for days, even months. My biggest wins have been ones I have added to a number of times like that but on a much longer time period.

Again thank you for the penetration my buddy.

[santim93]

No worries, thankyou as to be fair I just thought of it because of your query as I've tended to prevent ranging intervals before or seen them as a total loss. However, when you sit infront of one for 4hrs like now (!) It receives fruing not having a decent signal so that it's defo something I'll be working on.

Clearly there'll be a couple of touches on the inside of the oppostie channel wall in a range before the breakout to the tendency aspect (and a couple of small win trades) so not having a automatic TP set will be a fantastic idea to make the most of the breakout when it comes.

Interestingly the initial range bottom channel line became new ranges upper channel line (approx).

Looking at H4 you'll be able to see price is now about 20pips off the bottom channel line of an 5week mature tendency. So looks like the move tommorrow could be a bounce to the upside. . .unless that was a double top in 33100 on 6th and 9th.

[Strikersipk]

There have been too many days of 4 hours of a tight range. Here's a small poem. It may be because it is the summer.

Initially it would eat my account.

Then I would sit out.

Subsequently this thread came .
https://www.cliqforex.com/attachments/1528698041709649168.jpg

[Strikersipk]

Interestingly the initial range base channel line became new ranges upper station line (approx). Perhaps the concept of going long at the base of the range in an uptrend, taking off half at the opposite end of the range (SL to BE), and repeating each time price gave a signal off the underside, and holding anticipation of a breakout could be a egy for use earlier in the trading day (beginning with London). If we are going into the afternoon maybe we could just snake around if we have good at it we can make a killing.

I was thinking if we had been on a greater time period we could look for the good'ol 123 change, but with all the 30 sec we may have to use indiors like MACD and RSI together to spit out a signal once we have decided it's time to drop down to look for one.
https://www.cliqforex.com/attachments/15286980441446559303.jpg

[Strikersipk]

As I was typing about that entrance, this happened:

Price was on peak of the new channel, oversold (5M). On the 30s, RSI comes from oversold land and MACD crosses down.

Maybe you could set a limit order only under the candle that the arrow is pointing , or you could enter a short market order.
https://www.cliqforex.com/attachments/1528698047794143915.jpg

[Strikersipk]

I changed the settings on RSI to 6 periods, and changed the overbought/oversold levels to 50. It appears to work pretty well so far searching for a sign in the cross of the 50 line with a MACD cross also. It feels weird typing this material because I have always had such a bad feeling of indiors. They certainly seem to work better through a silent, ranging market, together with MTF and S/R.

That I think that it's interesting that although MACD started crossing up at the base of the station on the 30 sec, while the 5M price was in the base of the station and oversold, RSI kept us from some lousy trade/exit.
https://www.cliqforex.com/attachments/15286980491680734979.jpg

[santim93]

Maybe the idea of going long at the bottom of the range in an uptrend, shooting half off at the other end of the range (SL to BE), also repliing every time price gave a signal off the underside, and holding in anticipation of a breakout could be a egy
I like that idea a lot as it means you'll be caught out accepting profit and closing all positions just before a wonderful breakout. Good one. Price action at the channel line should provide a fantastic signal with a small pause, or ofcourse you could just jump in with a commerce the other way when it strikes the line. It appears a lot of the time price will move immediately away from line prior to getting a fantastic signal but in the event that you can tuneup your own indis to accomplish this have to be good. Nice poem incidentally, but don't quit the day jobhttps://www.cliqforex.com/attachments/1528698024.jpg


Oh yeah, as you touched on in other thread, what are you thoughts for determining if a range has started? It's not easy to distinguish between start of a range along with a trend change or such like. I guess price much touch a line 3 occasions to be considered a support/res price so perhaps same rules for range. Problem with this is a range may just have 3 rolls on each side before a break out making trading that range hopeless before it's gone!

[Strikersipk]

I like that idea a lot as it means you will be caught out taking profit and final all positions just before a nice breakout. Good one. Price action in the channel line should give a fantastic sign with a slight pause, or ofcourse you could jump in with a commerce the opposite way when it strikes the line. It appears a lot of the time price will probably move quickly away from line prior to getting a fantastic sign but in the event that you can tuneup your own indis to do so have to be good. Nice poem by the way, but do not quit the day jobhttps://www.cliqforex.com/attachments/1528698024.jpg


Oh yeah, since you touched on in other... Hey buddy I don't have an excessive amount of time but I'd like to say for the start of the range I believe I will be looking at time daily and news coming out, then 1H S/R and seeing how price/BB responds. . .gotta go!

[santim93]

Hey,
News events - yes really good idea particularly when price is waiting to decide which way it's likely to go based on what the news says. So ranges need to often/sometimes form before big news?

[Strikersipk]

Well I'm not sure but from my own observations I have noticed that the more traders are expecting some news, such as NFP a week or two FOMC yesterday, the more the market will range going into it.

When London closes, eurusd requires a few hours to end up and will generally range until Tokyo gets rolling, so that is exactly what I mean by time of the day.

I would imagine that there would be a range prior to each market opens, but they would probably have different characteristics.

At 8:30 EST now we've got trade balance coming out and that is the only piece of advice for two hours until we get crude oil inventories, then at 2:30 we possess the federal budget coming out.

It'll be interesting to see what occurs now.

If the data is all in agreement (all positive or negative for USD) perhaps we can see some continuing movement in 1 direction.

If the data is conflicting, maybe we can see some chop?

And what about our idea about markets that range while awaiting news? Since we have three bits of news spread out so much does that mean that the market has lots of time to await the news and therefore lots of time to range?

I believe also that we should keep your eye on commodities and equity markets now, as I guess these can help us gauge the market climate.

[santim93]

I love how you're coming this obviously news informs the institutions which produce the market go so it makes sense to see news when searching for and expecting the formation of tendencies and periods of consolidation. I have not been into news previously as I mentioned but would love to find a chart of todays price action marked up with if news came out so that we could see any impact which releases could have had?

Dead instances from the market (outside london and NY) are very interesting in terms of range phases there's defo scope to get a scalping egy there but I have not looked into these times . For sure SL's are significant tho because very flat can turn very abruptly outside busy periods. I always try to see gld and oil for correlation as they can pull and push pairs around sometimes just with a few key pips. Gotkindly go walk the dog today keep em peeled!

[Strikersipk]

I like the way you're coming this clearly news informs the associations that produce the market go so it is reasonable to see news when looking for and expecting the formation of trends and periods of consolidation. I have not been into news previously as I mentioned but would really like to see a chart of todays price action marked up with when news came out so we could observe any impact that releases could have had?

Dead times from the market (outside london and NY) are extremely interesting concerning range phases there is defo scope to get a scalping egy there... Wow there's so much material we must cover. Let us do this.

[Strikersipk]

followup on the wedge
https://www.cliqforex.com/attachments/15286980512079916592.jpg

[Strikersipk]

A surprisingly negative trade balance came out now at 8:30 and price pushed through eurusd bull stops.

Equity markets in the US panicked on the information and need for USD surged pushing eurusd down.
https://www.cliqforex.com/attachments/1528698054272973159.jpg

[santim93]

Ever heard the expression'no news is good news' well that surely doesn't seem to apply in the area of Foreign Exchange!

Frank when you state inventories panicked and need for USD jumped does that imply there was a market off on wall st and the cash put into buying usd as a safe haven? Sounds sensible. If that's true would be a temp 24hr item or will this price now'grip'. Or will the need for usd persist for a couple of days?

Clearly this pair has two sides so is there a european equivalent of NFP etc that has a similar influence on the pair?

Additionally when you mention that the bulls stops being taken out is that visible in price action around certain levels or are we just reminding ourselves that's what's going on? I'm learning a lot from the threads here hope I could be of some help back. I'm no pro but been messing around for long enough to begin earning a few pips within this game. https://www.cliqforex.com/attachments/1528698060.jpg

[Strikersipk]

Ever heard the saying'no news is good news' well that surely doesn't appear to apply from the area of FX!

Frank if you say inventories panicked and demand for USD jumped does that imply there was a market off on wall st and the money placed into buying usd as a safe harbor? Sounds reasonable. If that's the case would be a temp 24hr item or will that price now'grip'. Or will the demand for usd persist for a few days?

Clearly this pair has two sides is there a european equivalent of NFP etc that has a similar influence on this pair?

Also when... This summer, since I have had the time to concentrate on learning a bit about intraday momentum, I have noticed the dow and eurusd prefer to move together when there are enormous moves.

My guess would be that capital tied up in equities and commodities ( they have lots of demand whenever there is risk appetite ) flows out of those asset classes into USD. I also think that it makes sense that if international equity markets are fearful, international investors may be inclined to purchase Tbills that require USD. Hence the surprisingly negative trade balance figures that this morning caused equities from the US to market off and this drove demand for USD.

This is just guessing and observations that may or might not be accurate. Correlations can and do change and that's burned me earlier. That's why I prefer to try and have a gauge on sentiment before turning into technicals.

And steve my man two heads are better than I feel like its a thousand piece puzzle and it will be solved more quickly with more people working on it.

[Strikersipk]

Oh and around eur market movers I am not so familiar because they occur while I am fast asleep.

If I had to guess I would say that unemployment, inflation measures like CPI and PPI would be big... ECB minutes and addresses are things that I wake up and notice that some sexy shit was dropped as a consequence of. General economic news out of the united kingdom and Germany will also be great likely.

[santim93]

Two heads indeed, sounds good. I'll start tracking european news and some other effect on the london open and early hrs for eur/usd. The asian session was particuarly active recently and following major moves in NY it makes sense for any corrections to start there when NY closes on a high/low.

London has just opened and has instantly broken the 10hour long asian up-trend which started with a double bottom. When you look at the 1H chart, price was far away in the 50sma this pullback from 1.2830 has been soo inevitable.

Price has just moved 60ish pips down in the previous 20mins and if you look at the 1m chart you will see a beautiful lil pullback after price breaks down via 1.2912 giving a clear entrance signal for that movement down. Additionally there are two candles hitting a solid wall at 1.2906 a great confirmation indiion.

The one thing which I don't comprehend is does the dow go eurusd or the other way round?! Btw he is not my dog, me and gf are just looking after him for a few weeks. He's great tho, you truly get to see where you reside when you've got a dog to walk everyday, we're next to the forrest therefore it's a holiday for him too. S are nice but you can't walk them. Suppose you can try?

[santim93]

Hey,

Just a 10 pip wide channel here however, the underlying tendency on 5m was down and sure enough that the breakout was to the south west - 20pips from top of range.

If we say there are 4 peaks for this range which you would have recognized it as a range by peak 3 and surely peak 4 then a market at those prices could have been a b/e followed closely by 20pip win - or 10pip based on TP.

A few things to consider - price sometimes breaks range lines with a pip or two so SL should be perhaps 4pips above range line here, or are lines incorrectly drawn? Also should place order as soon as price touches line as can reverse quickly. To get a risk of 4pips 20 have been around the table here.

Edit- price has bounced back into top of range region so TP at the 1st Fib would have been great for 18pips or so.
https://www.cliqforex.com/attachments/15286980682123932035.jpg

[Strikersipk]

Since NY open there've been three pin bars, an inside bar, and an outdoor pub. Just like five seconds ago another trap pub formed. (all of these at the swing high/lo s)

3 of the PBs aren't perfect (the open/close weren't within the body of the previous bar) --such as the one that only closed that is not on the chart I posted.

The perpendicular line is NY open. Now I really don't believe we would have identified the range from technicals however, however, the range might have been anticipated from the lack of news coming out.
https://www.cliqforex.com/attachments/15286980331610941039.jpg