Greater than 50-50, ability to predict range market?

[MrAgi1]

It is difficult to prove that anyone or tool can predict the market price direction consistently over long periods of time. That is have a win rate significantly greater than 50/50. And for those who can, or tools that can, such information is obviously not publicly know.

However is it possible to predict(must not be 100% correct) when a market would be range bound(direction is irrelevant), more than 50% of the time?

Can tools like implied volatility, volume-order flow, T.A indicators be used to objectively(prove/research/backtest) predict significant greater than 50-50 a range bound market existence or persistence?

 

[Quanto]

IMHO yes
But need to employ an army of math wizards (fintechs, quants), and/or a good program or AI.
Of course need a very good real-time data source, not something buggy like YF.
Ie. one needs to make a big investment first...

 

[murray t turtle]

It is difficult to prove that anyone or tool can predict the market price direction consistently over long periods of time. That is have a win rate significantly greater than 50/50. And for those who can, or tools that can, such information is obviously not publicly know.

However is it possible to predict(must not be 100% correct) when a market would be range bound(direction is irrelevant), more than 50% of the time?

Can tools like implied volatility, volume-order flow, T.A indicators be used to objectively(prove/research/backtest) predict significant greater than 50-50 a range bound market existence or persistence?

%%
YES;
some of its public. Get a room full of quants, Long Term Capital did that .......
200 day moving average is worth much more than 10X a 20dma =200.
Trend study helps, many years ; bull markets = much different from bear markets\trends.
STOCK Traders Almanac = a great read, but i don't only average bull + bear markets together.
THAT would be like\ not knowing when a HI volume bin buster crop of apples is in, for 2023[NOV 26 week\2023]
By the way, its called weather forecasting not weather prediction [''not 100% '' as you noted]

 

[Rams Fan]

By the way, its called weather forecasting not weather prediction [''not 100% '' as you noted]

Nice, Murray.

If more would accept that all any edge does is provide a forecast rather than a prediction certain, more would be profitable even if it were cloudy with a a chance of meatballs.

 

[zghorner]

Price hugging VWAP during the most liquid trading hours + Keltner Channel (blue) dominating bollinger bands (green) is the only thing I have found to help avoid chop (outside of price having virtually zero follow through lol).

 

[Laissez Faire]

I have an extensive and detailed dataset which gives me the opportunity to ask questions and find answers, i.e., this happened - what typically happens next?

I never specifically tried to predict a range bound condition, though. One way to check for that intraday would be that the day closes in the same segment as it opens. On 8 years of data (e-mini S&P 500) that's only occuring in about 10 % of the sample.

Further, a day going up usually (77 %) closes at the upper end of the range and a day going lower usually (63 %) closes at the lower end of the range. This reflects the bullish nature of the stock market as a down day is more likely to recover by the close versus an up day losing gains.

Looking at the daily chart it seems obvious that range bound conditions tend to occur after a larger, extended move. Seasonality may also be a factor worth considering. For example, November is historically a pretty damn bullish month while summer can often be more of a grind.

 

[murray t turtle]

Nice, Murray.

If more would accept that all any edge does is provide a forecast rather than a prediction certain, more would be profitable even if it were cloudy with a a chance of meatballs.

%%
THAT;
+ seasonals apply. Cool
I found out why Save-A Lot was dump pricing very good apples @ 2, 3# bags for $5.00[$2.50 each];
reverse engineered it \record apple harvest overall. No wonder prices dropped;+ thats her job as marketing director to move product. Each market can be different\SEPT just happens to be a big sell month for stocks + apples. Even though USa SEPT sold more stocks\ETFs than apples 2023.
On ETFs trading\ a % of investment profits works well.

 

[ironchef]

IMHO yes
But need to employ an army of math wizards (fintechs, quants), and/or a good program or AI.
Of course need a very good real-time data source, not something buggy like YF.
Ie. one needs to make a big investment first...

No need to hire an army of math wizards.

You just have to follow Brooks, draw two trend lines on a price chart, one for support and one for resistance.

 

[padutrader]

can predict the market price direction consistently over long periods of time

you need not predict.

just follow

 

[padutrader]

No need to hire an army of math wizards.

You just have to follow Brooks, draw two trend lines on a price chart, one for support and one for resistance.

trend lines are great for knowing present market direction and for warning of trend change.

You can follow anybody .Brooks is tough for traders who have no experience of TA and price action.

For learners of PA i suggest Wade.and Wade is free

He teaches basic PA and is lot easier to learn and he teaches you, assuming you are a dummy.

he tells you when to enter when to exit where to put stop.

Brooks does not feed you like a baby but Wade does

Brooks assumes you are already have a knowledge of TA