Hi! Can anyone tell me the best indicators or any other methods to determine what type of market we are at present time, not in the past; I only know about ADX which lags…
Also I think I need to know some methods or smart indicators that at least give some hints about soon trend reversals or consolidation market entry. The MACD,CCI or RSI divergence I heard are not always reliable, and for consolidation market detection I even don’t know any method or indicator!
don’t really think you need indicators to see what’s the current trend 
anyways, you can give Ichimoku a try.
If you start to think of them more as complimentary tools as opposed to price or market behavior predictors you’ll co-exist a whole lot better.
The object of the exercise when introducing various elements to your price chart template such as indicators is to enhance & improve the original base framework.
In other words they should be viewed as an addition or a supplement to your basic template not a replacement for it.
You can actually determine all that you seek simply from using combination timeframes to identify the price structure of the market instrument you’re observing.
If you haven’t already done so you would certainly benefit from exploring & studying the basics of market structure, including peak/trough analysis….supply-demand & support-resistance overviews & the constituents of both trend & range formulation.
You can access some of that via the Babypips school & the remainder by inputting the subject matter into your search browser & go on a research hunt.
Most of the above will be directly related to not only the type of trading strategy you decide to implement (ie: short or medium time horizon…range or trend type market cycle), but also the specific timeframes you intend to use as your point of focus.
Once you know exactly what type of market behavior you’re looking to operate under & you’re familiar with the different types of structure (trend/range/consolidation etc) you can then begin to explore the various indicator combinations to see if they marry up with your trading objectives.
You can try short-circuit or fast track your way through this process by replacing that foundation with a bunch of indicators, but unfortunately the market will likely teach you a series of very painful & expensive financial & psychological lessons.
So you say like predicting the start of a reversal on H4 observing the market behavior lets say on H1 or 30 minutes charts but what about consolidation situations? They can first look like new trend or reversal but end up to be fake signals…like some kind of traps! Sideways markets were the most problematic for me until now.
Are you viewing them in the context of an established or confirmed trend?
If so, then a breakout from a consolidation in the direction of the previous move would be considered a trend continuation leg.
If however the consolidation results in a counter trend move, then you need to establish & determine whether it’s a sufficiently viable opportunity to bet on. Either scenario will require a set of rules to govern your entry & subsequent trade management, & your exit parameters in the event of a false break or shake out.
You don’t need to predict reversals though do you.
As long as you’re able to identify when an instrument is exhibiting signs of exhaustion - for instance the construction or make-up of the price bars + the failure to continue trading to fresh highs or lows - you can begin preparing for where the most appropriate location on the technical chart is to begin building a position.
If the potential reversal is going to be successful it will be because whatever is driving & influencing the counter move is being enthusiastically backed & supported & you can get a flavor for that by keeping tabs on end of day market wraps from your brokers news feed or the likes of the free Bloomberg & Reuters pages.
Presuming the 4 hour chart is your primary or default timeframe, you’ll have plenty of time to take advantage of either a change in market flow/direction, or a resumption of the primary trend.
By combining consistently productive price aids such as trend lines, previous swing points, key big figures & round numbers & support/resistance areas, you can obtain a feel for the intensity & strength of a market move.
If you also blend that information with the fundamental themes the market is digesting & processing, you’ll be placing yourself in an advantageous position to react to that combination of market influences.
Add in an indicator to offer a confirmatory nod on & around your potential entry point & you’ve got most of the key ingredients required to set your stall out.
The recent price action on the eurusd gives you a feel for the type of thing I’m talking about.
This 2 month view on your 4 hour chart tracks the neutral-bullish view right up to the time it begins to potentially break down through the trend line last week.
That breakdown coincides with a round number that covers a previous swing low & local area of support (4325). The trend line/round number combination is re-tested via a pullback, which could represent one of your entry consideration rules.
The events that prompted the breakdown in price revolved around a noticeable increase in risk aversion, which negatively impacts sensitive currency pairs such as the euro. Heightened debt concerns & further Greek & Portuguese default fears were high on the agenda around the end of August.
Add to that the disappointing data being released over the next few days, including lukewarm european job numbers, worse than expected manufacturing & growth output expectations & you have all the necessary ammunition to sell into the bearish flows.
Those major market influences get reflected in your charts during the normal business day & unless something comes along to trump the over riding themes driving the momentum, traders will jog down the path of least resistance.
Using that event as a potential entry set up, you can now bring an indicator into play by drilling down into your 30 minute chart & using the confirmation trigger in line with the dominant flow of the price action.
Anywhere after that pullback underneath the 4300 figure, with a sloping down of the indicator off the upper level will get you short with a stop back above the line & an initial target down to the next swing zone at 4100-4050.
Tracking the move by staying alert to the events that continue to orchestrate the momentum will ensure you match up the technical picture with the fundamental drivers.
No predicting required or the need to swamp your charts with assorted indicators.
First of thanks for the good and pertinent info you exposed. But there are still few issues:
You can’t expect anything. Which is why whenever you commit money to the market you ensure you cover your ass in the event of things not going to plan.
Your job is to identify & execute low risk, high probability betting opportunities whenever they present themselves based on your approach, risk attitude & trading objectives.
Of course they don’t. If everything worked according to the textbooks you & all the others wouldn’t need to frequent places such as this.
Which is why if you haven’t already done so I’ll repeat my original suggestion & advise you roll your sleeves up & begin researching & investigating the following:
I didn’t suggest you trade trend breakouts.
I explained why you didn’t need to predict a directional move & offered up an example of how you might avail yourself of a potential consolidation/exhaustion opportunity based on your reply to my first post.
It’s simply one option. If it ignites a spark then cool, if not then you need to explore options that are more suited to your intended approach, style & risk limits.
I’m sorry to bang on about it, but if you had even a basic appreciation & understanding of the subject matter highlighted in bold inside the above quote you’d make life (going forward) a whole lot easier for yourself.
You can’t really expect anything. If you are using some trend indicators on your charts eg moving averages, ATR etc you can make use of those to determine the trend. Then make use of what you know on candles to “determine” the movement. Some candle patterns also indicate pattern continuation but i will leave it to you to find out. Of course, as doubleecho iterated, cover your ass in your trades.
to look for reversals, besides these tell tale patterns like hammer, dojis, you should also look at supply and demand liness (S&R) and price. Is price making lower highs and higher lows? Incorporate all these “signs” to make judgement. Not just the classical reversal patterns only.
That’s called the trading game for you.
Most often than not, very good or very bad news (that are not anticipated) would surge in either direction. There are strategies out there people created to trade news. It a matter of doing research on them and testing them out yourself if you ever want to play the news.
That’s why you always need a stop order on your trades in case something went wrong with your plans.
The only issue you have at the moment is one of identification.
An inability to confidently identify what cycle the market is currently operating under + an inability to confidently identify the structure & typical behavior of consolidation & reversal phases.
It’s already been suggested that indicators aren’t the answer in either scenario & you’ve received advice as to how you might improve your confidence & competence levels to assist in the identification process of those two issues.
Until you make a decision to tackle your lack of knowledge & awareness surrounding those core events you’re simply going to continue spinning around in confusing circles.
He wasn’t suggesting you trade the news. He was explaining that familiarizing yourself with what traders were focusing on & what was driving momentum, would greatly improve & enhance your market view.
Combining that focus & awareness with technical skills won’t do you any harm at all.
Ok, but from where or how can I learn all the stuff related to “market structure, including peak/trough analysis….supply-demand & support-resistance overviews & the constituents of both trend & range formulation.” ??
All over the Web there is a lack of sites or other sources of information to better improve the trading skills!
So nobody knows nothing concrete about these subjects… but still make comments and give advices… :29:
There are hundreds of websites forums articles webinars and online magazines that have thousands of hours if not more of material you can study. Your post below saying the the people here don’t know about these subjects and still give advice is just plain wrong. As with all forums there are trolls but in this thread I have seen none. There are a lot of knowledgeable traders who are nice enough to lend you comments at babypips more than I can say about some other forums. But what it looks to me is that you want all this spoon fed to you. There has been plenty of advice. Are you sure you even searched google for articles? Because everyone here knows it takes time an effort on YOUR part but your not showing that type of attitude with that type of retort. So to help you along and hope you can break that shell of yours here are some things I look at. I am on my mobile ATM so it’s up to you to find the websites. These should get you started and no one likes a whiner. If you want to learn about supply and demand we have a lot of good threads here including eremarket. Please put more effort into your own study. You get out what you put in. That’s the holy Grail of forex.
Fxstreet
Investopedia
Whatever… But by “market structure, including peak/trough analysis….supply-demand & support-resistance overviews & the constituents of both trend & range formulation” maybe he is referring about using chart formations and patterns as wedges, triangles, head and shoulders and such…?