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Thread: Can you profit in a ranging market?

  1. #1

    Can you profit in a ranging market?

    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.

  2. #2
    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.

  3. #3
    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.

  4. #4
    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.

  5. #5
    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?

  6. #6
    Quote Originally Posted by ;
    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.

  7. #7
    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.

  8. #8
    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 .

  9. #9
    Quote Originally Posted by ;
    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.

  10. #10
    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.

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