Is it possible to know whether the market is a ranging or trending market?

H

helpme_please

Some people talk as if they know whether the market is presently in a ranging or trending market, and apply the appropriate steps accordingly. I'm always been puzzled about this. For me, I can only know after the fact. Maybe I'm not as clever as others, especially compared to the elitetraders here.

My question to the elitetraders. How can one know whether the market is going to range or trend at any given time?
 
I feel obliged to answer as I'm on your "following" list. :)

In the bigger picture... Conventional wisdom has, that if the slope of the 200 Day average is upwards, it's an up-trend. Downwards slope, it's a down-trend (bear market). It's always a good thing to "trade around the market's current bias". That is if trending up... either longer term or shorter... lean towards the longs. Vice versa in sells/shorts if market is trending down.

As the market changes trend, it's not clear at first... that is, "Did the market just change trend, or is this counter move just noise in the continuing trend"? You'll only know in hind sight.

The market generally does not experience long periods of "sideways"... but when it does the price pattern is more of a "horizontal, back-and-forth"... which you can trade via buying the bottom of the range, selling the top of the range.

(My first exposure to TA was in the price charts from ~1966-1982. That was a prolonged "sideways trend"... recalling from memory, the back-and-forth swings across the range were like 25-30%. Each swing could have been correctly traded as bull or bear market though the overall BIG trend was sideways.)

And as a final note... if you learn Price TA, identification of the "trend" won't make much difference. The trend only really matters if you plan to "hold a long time". I don't recommend that at all. Rather, suggest playing for the "swing" move over and over.
 
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Possible?, it's essential for a trader to know where you are in a market cycle. If you want to learn how to read price action in a comprehensive fashion, which is not an option for an active trader, I highly recommend Al Brooks's video course and ignore the trolls and naysayers. ET has a legion of the clueless who feel compelled to comment anyway.
 
It is totally totally not important to know whether the market will be in big ranging or trending market.

BUT!!!!
Very important thing is :

You must know whether the market is choppy or trendy.

Choppy market - DON'T TRADE !
 
helpme_please said:
Some people talk as if they know whether the market is presently in a ranging or trending market, and apply the appropriate steps accordingly. I'm always been puzzled about this. For me, I can only know after the fact. Maybe I'm not as clever as others, especially compared to the elitetraders here.

My question to the elitetraders. How can one know whether the market is going to range or trend at any given time?
More...

It really depends on the time frame. Someone who only looks at daily bars is seeing something different than someone who only looks at 5 minute bars.

As far as applying the appropriate steps, you should be looking at more than one time frame.
 
They said:
It really depends on the time frame. Someone who only looks at daily bars is seeing something different than someone who only looks at 5 minute bars.

As far as applying the appropriate steps, you should be looking at more than one time frame.
More...

True. There are shorter term trends within bigger trends. The shorter term ones act the same as the bigger, but for less time and distance.

The problem with "looking at more than one time frame".. is that they can be contradictory. One shouldn't necessarily look for/require the short term trend to be the same as the longer term one. The shorter term trend is a thingy within itself... and is completely consistent with the notion of being a "correction within the longer term trend".
 
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