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

[Scataphagos]

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

You can only "predict" up to a point. That is.... "After ____, usually comes ____" That's correlation/prediction?

It's "prediction" up to a point. That is, you KNOW what "usually" happens, so you "predict" it will be the same again this time.

 

[Snuskpelle]

Of course it's only crystal clear in hindsight (this also tends to conveniently be what most people are actually discussing and meant by statements such as the examples given in the OP). For actual trading you're relying on subtle signs whether a trend is strengthening or abating. I think answering "why should there be a trend here in the first place?" is a helpful one, even as it has several types of answers (ranging from "technical"/historical price behavior to fundamental).

 

[Scataphagos]

Of course it's only crystal clear in hindsight

What's "crystal clear".. "fact"... is INDICATION. That's all you get. Of course we'd all like to know about "follow through". We don't get to know of that.... ever... you only get to evaluate that "on the fly".

 

[Snuskpelle]

What's "crystal clear".. "fact"... is INDICATION. That's all you get. Of course we'd all like to know about "follow through". We don't get that.... ever.

Sure, it's basically tautological. OP is wondering why people say like they're sure the market is trending or ranging. They're generally sharing their observations on that it just did, rather than being correct about what happens next. He isn't missing some kind of magic here, beyond the very subtle on the fly indications some traders/systems are able to pick up on as you're alluding to.

 

[Scataphagos]

than being correct about what happens next. He isn't missing some kind of magic here, beyond the very subtle on the fly indications some traders/systems are able to pick up on as you're alluding to.

You don't get to KNOW about "what happens next?". You can infer what is "likely" (through Price TA), and that's what you play... "on the fly" as to how far it goes.

 

[easymon1]

How can one know whether the market is going to range or trend at any given time?

when you find out, let us know, lol.

https://optimusfutures.com/tradeblog/archives/analyzing-price-action
"...During an uptrend, the price usually makes higher highs and higher lows, and in a downtrend, the price makes lower highs and lower lows – this is a general market theory, and although it sounds too simplistic, we will see how this also applies to live market actions."

 

[Sprout]

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?

Yes, it is possible. The clue is by observing the 'absence' of something vs the 'presence' of something.

If you press down on a car's gas accelerator, then one should hear a corresponding increase in engine rpm's. If the increase in rpm's does not manifest, then there is a 'change' from an otherwise known 'continuous' mechanical operation.

Volume can enter/exit the market at any time. Most folks view this as uncertainty. However when combined with the comparison and contrast of slower timeframes with faster timeframes, one can derive PRV - pro-rated volume.

The logical sequence is then, observing 'What Came Before' -> 'What is happening now' -> and through PRV anticipating 'What Must Come Next'.

 

[murray t turtle]

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.

%%
CAN NOT predict it/no one can;
some use ADX, but I prefer 50d ma/200 dma /20 dma.
HELP me Please/OK.HAVE to look for repeating patterns/like tech trends/50 dma 200dma+ 20 or 21d ma may not mean much @ all. DIS down mostly, never did like a 6' fake mouse myself.

Sorry we don't get to make up our own defin9itions of a trend or 36'' yardstick/we could all be billionaires quick if we could predict. Actually I figured it would open do n today/but a wrong plan helps also/tech trending up again 50dma/200dma..............................................................................................Good question Help me

 

[volpri]

First define clearly: what is a trading range?

A trading range is:

1) in it’s simplistic definition it is any mostly horizontal area of price movement that consist of two-sided trading thus indicating uncertainty in the market and indicating that both bulls and bears are in balance. That PA is, of course, what creates the trading range in the first place.

2) it can consist of one bar such as in a doji or it can consist of several bars.

3) If it slopes slightly up the bulls are a tad bit more aggressive. If it slopes slight down the bears are a tad bit more aggressive.

4) If it slopes very much it should be labeled as a channel. While a channel is really just a tilted trading range the techniques of trading a bull or bear channel do change some as opposed to trading a horizontal TR.

5) it can be broad or it can be a tight and narrow TR. There are rules to follow when scalping trading TR’s.

6) the lines that contain the channel can be labeled as resistance for the top line and support for the bottom line.

7) a pull back is a small TR within a specific time frame where previous PA indicates that the previous trend will probably resume once the present PB ends. A pullback is generally not conducive to two-sided trading. On the other hand, a TR with tradable PA (i.e. trading both directions) that involves fading the outer limits; i.e. not expecting continuation of a previous trend, and is composed of PA that is conducive to two-sided PA can be called a TR. But it is necessary to wait for evidence that the present PA is conducive to TR techniques. There are exceptions but generally around 20 bars of horizontal PA is enough to be thinking “trading range” and not PB. At that point I start to use TR tactics. On occasion 15 bars is enough but generally it is better to wait for 20 bars. The reason you want to wait for evidence to employ TR tactics is because you want probability to play in your favor. Once 20 bars of sideways PA happens then count the BO attempts and 80% of BO attempts top or bottom will have failed and within 5 bars any BO attempt generally starts heading back towards the range. Furthermore, the odds now favor that 80% of BO attempts failing AFTER 20 bars will continue at least enough for several trade opportunities.

Basically, a TR is usually what is used to describe any area of a chart where PA is mostly horizontal and not trending. The basic idea is to look for opportunities (setups) to trade the market in both directions. Several different setups can be employed including fading the edges, and even other setups if the range is broad enough to employ them.

As speedo says study MR Brooks on trading ranges. Much of what I said above is concepts he expounds upon.

 

[Peter8519]

It would be difficult to use past data to predict future outcome with certainty. OK. I stating the obvious. The best we could do is to look at the statistic of advance and decline. The net effect will be the trending up or down or side way. We could dive in and look at which sectors/industries are advancing or declining. Place our bets and hope for the best!