How can we tell the market going sideways with price action?

[teabox]

hi,

there were times when i saw good signals (chart patterns, volume, etc) to long or to short and i entered a position. but then after one or two more candle sticks, the market turned out going sideways, hit the stop-loss and i scored a few losses. lucky me it's all on demo account.

is it possible to detect sideways market with just price action before it happened?

i've done testings with indicators such as bollingers, adx, and 2 MA lines but i can't say i'm satisfied with the results.

thanks

[CodeMeister]

There are no sure fire methods of course.

Here is the way I anticipate consolidation. The last 2 to 4 hours of the NY session will generally be very quiet. The Asian open may continue the consolidation or break out.

After a strong move, I look for a reversal (don't get fooled by a pullback and continuation). Once the reversal is complete, consolidation usually begins. This situation can happen at any time, but usually after a break out.

If I can't recognize the stage the market is in, I bail and look for something interesting on TV to watch.

Once you recognize these patterns, you will notice them again and again.

[happy pipbanker]

hi,


i've done testings with indicators such as bollingers, adx, and 2 MA lines but i can't say i'm satisfied with the results.

thanks

Correct, cause no one is satisfied with results trading with MAs
Market is designed to get you on a trade and fail, unless you know what you are doing.
Banks do know how to take your stops and they do it every day. Think about this every time you put on a trade.

[ClarkFX]

There are no sure fire methods of course.

Here is the way I anticipate consolidation. The last 2 to 4 hours of the NY session will generally be very quiet. The Asian open may continue the consolidation or break out.

After a strong move, I look for a reversal (don't get fooled by a pullback and continuation). Once the reversal is complete, consolidation usually begins. This situation can happen at any time, but usually after a break out.

If I can't recognize the stage the market is in, I bail and look for something interesting on TV to watch.

Once you recognize these patterns, you will notice them again and again.

If only one can quantitatively define trend and consolidation.. That would be the "holy grail"...

[CodeMeister]

Been there, tried it several times and just couldn't crack it. So much easier just to look at a chart.

[Rjmiller421]

Correct, cause no one is satisfied with results trading with MAs
Market is designed to get you on a trade and fail, unless you know what you are doing.
Banks do know how to take your stops and they do it every day. Think about this every time you put on a trade.

This is far from the truth. There are certainly ways with MA's to determine if the market is moving sideways. You are not going to find a sideways market using shorter time period MA's like a 10 and a 20 together on a 5 minute chart unless you are trading on a tick chart. But you can use a 100 and 30. Also keep in mind the time frame you are looking at. If you want to find out what the market looks like and you are using 5 minute charts for entry/exit, then looking at a 30 min chart will give you a better idea of market conditions. As the lines get closer together you know you are consolodating as they get further you know you are trending.

[ClarkFX]

Been there, tried it several times and just couldn't crack it. So much easier just to look at a chart.

I'm sure you're familiar with Raygun, I think he may know...

[MoneyNVRSleeps]

I like to use Volumes myself. Although they dont represent volume as a whole, it shows the intrest in traders trading at that moment.. This is also something instituations use, as they wont trade when no-one else is, so why should you or I for that matter.. I like to use increaments of 50, so 1M TF= 50, 5M = 250 , 15M= 750, If the Volume is under those, stay out.

Also, the 14 MA is valuable to me, using Heiken Ashi Bar WITH-IN the 14MA range by 5 pips.. If Heiken Ashi Bar is FULLY under/over, then you have action..

So, to Me, #1 price action, #2 Volume, #3 14 MA Over/Under

[Buckscoder]

Ahem.

There are a million possible ways to recognize a trend or a range. Mas, sars, pa, ...

Question is not to recognize what was going on in the past.

The future is unknown. Nobody can say if your trend or range keeps trending or ranging and how long. Every trend and range ends at any time in the future and future begins after the present (which is not really present at all, because present is infinitely small).

So, you have past and you have future and your job in a nutshell is it to find out based on the past how probable it is that a trend or range ends or continues.

Got it?

[jpadventure]

hi,

there were times when i saw good signals (chart patterns, volume, etc) to long or to short and i entered a position. but then after one or two more candle sticks, the market turned out going sideways, hit the stop-loss and i scored a few losses. lucky me it's all on demo account.

is it possible to detect sideways market with just price action before it happened?

i've done testings with indicators such as bollingers, adx, and 2 MA lines but i can't say i'm satisfied with the results.

thanks

Ask yourself what results did your backtest give you. If you have taken a valid signal then what happens next is a win or loss, nothing more.

If you've tested, stick with it through the losses. If you haven't, test it.

Take ideas on how to improve the strategy in small tweaks at a time.