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

[QTrader20]

All day traders care about is whether or not it's a 'trending day' so one can either ride along with it or stop trading on the opposite side.

 

[Scataphagos]

I hope you all know that the definition of a trend is in the eye of the beholder, right?

I don't care to elaborate, but in general this notion is incorrect.

The ONLY trend that really matters in trading is the "swing" trend... and once established, is clear beyond "eye of the beholder".

 

[danielc1]

I don't care to elaborate, but in general this notion is incorrect.

The ONLY trend that really matters in trading is the "swing" trend... and once established, is clear beyond "eye of the beholder".

And what is the 'swing' trend then?

 

[Scataphagos]

And what is the 'swing' trend then?

That's a bit difficult to describe clearly, however...

Every security has a "normal noise oscillation range"... "noise volatility", if you will... where it can bounce back and forth without indicating anything about its overall trend. That range is a playable thing... it varies from a small one like utilities (which may be only 6%) to a large one like gold miners or oil which may be 25%.

If you're looking for the "swing play" (and I highly advise that you do)... you'll look to "buy the bottom of the range and sell the top" (vice versa on the sell side/shorts).... that sort of play for whatever security you trade. That's opposed to the "scalp" play where you try to capture "tics"... which I do not recommend.

 

[danielc1]

That's a bit difficult to describe clearly, however...

Every security has a "normal noise oscillation range"... "noise volatility", if you will... where it can bounce back and forth without indicating anything about its overall trend. That range is a playable thing... it varies from a small one like utilities (which may be only 6%) to a large one like gold miners or oil which may be 25%.

If you're looking for the "swing play" (and I highly advise that you do)... you'll look to "buy the bottom of the range and sell the top" (vice versa on the sell side/shorts).... that sort of play for whatever security you trade. That's opposed to the "scalp" play where you try to capture "tics"... which I do not recommend.

And how is this explanation not in the eye of the beholder, wich is you in this case, that determines what the 'trend' is?

 

[snowman80]

ranging or trending are terms used to describe past price behavior. replace ‘is ranging or trending’ with ‘was ranging or trending’.

detecting whether market was trending or ranging is easy

predicting whether it will continue to trend or range is hard

betting successfully based on your predictions is harder still

 

[Scataphagos]

And how is this explanation not in the eye of the beholder, wich is you in this case, that determines what the 'trend' is?

Once trend is established, it is clear. In the transition from "up-to-down" and vice versa, it is subjective. (There are short-term trends within longer term ones. To pick your way through all of it, you need to understand Price TA. Regardless of all the dopes and nay-sayers on ET, understanding Price TA is the best (only?) way to navigate the markets.)

 

[Scataphagos]

predicting whether it will continue to trend or range is hard

Cannot be successfully "predicted". Must be "played by ear".

All you get to know is the "possible beginning/ending" of a move. For the rest, you have to figure it out on the fly.

 

[SunTrader]

I'd add knowing, within a certain level of probabilities, that the trend has ended is hard. But not impossible like some seem to believe.

 

[snowman80]

Cannot be successfully "predicted". Must be "played by ear".

All you get to know is the "possible beginning/ending" of a move. For the rest, you have to figure it out on the fly.

i guess it depends on what you would consider a successful prediction in this context

i smell what you’re cooking in the second part of your reply