Hi! I think I found an important issue I do not know and I ask for your help… I believe for a day trader is very important to know the right market situation… So what I think I need to solve some 3 or 4 hours chart trading questions:
How can I know if the market is and will be in sideways movement,sideways-trending or trending movement?
How can I know if a breakout point is very close if the market is sideways?
How can I know if the trend will soon stop?
If the trend stops how can I know if a reversal OR a sideways movement will come again??
If I use chart patterns can they assure all around trading signals? (There are chart patterns for each market situation?)
How to use indicators if they are specially made for trending and non trending markets… so if the type of market is changing without warning the validity of the indicator signals are also obsolete??
A good trend filter is the 20 simple MA, if price is below it and the MA is pointing down then you can say you are in a downtrend(the opposite for uptrend). But is impossible to know if the trend will end, it could be a retrace or a reversal
The problem with newbies is that they focus on the future, and not in the present. I know what you are trying to do with your questions, I´m familiar with your feeling, you are trying to catch early moves and pull the trigger, well kid that is impossible, you will never know when the market is gonna change. So instead of trying to pick up top or bottoms, just wait for the market to change and then pull the trigger. You cant catch the 100% of the move, but you can catch 70% after some years of experience. If you want to make money on forex, DONT predict…just wait for the price to tell you something, and then make your move.
5.- CHart patterns are more reliable in bigger timeframes, so use the daily charts if you want to try chart patterns.
On 6 I was thinking about using indicators in general: there are strong trend indicators or sideways trending indicators. So if it is impossible to know which type of market we will be how to use the right one??
There is no indicator that matches the accuracy of your eyes matched with a brain that can recognize patterns as they develop. But that takes lots of screen time and I don’t know of any shortcuts.
There are a few knowns. A market will never range forever. The longer it is caught in a range, the more likely it is to break out. Similarly, the longer the market is in a trend, the more likely it is to retrace and consolidate. The price will not go up (or down) in a straight line - there will be pullbacks which are good entry points. Do not take an entry on the third pullback - the chances of another run is low. These statements are true for any time frame; but remember the higher TF (1H and above) provide more accurate signals
Gas mentioned trying to catch 70% of a move. That is really difficult even for an experienced trader. I have heard others recommend 33% to 50% which is pretty decent if you can do it consistently.
The market is currently moving sideways and there is no unusual activity, trading activity can be identified using volumes.
This is more tricky to identify, And but by identifying if there is more activity on the peaks or troughs you can pretty much figure out which way it will break.
The trend will end soon after seeing exceptionally high activity.
By working out which market phase you are in, distribution, accumulation, re-accumulation or re-distribution.
Chart patterns are absolutely essential to identify what is happening in the market.
Your eyes are a specially made indicator that are best suited to identify trending and non trending market.
There is a lot more to the answers above, they are all potentially full subject matters in themselves, what I do is forget at least 50% of it, and stick with trend trading off of support and resistance, it’s easier and more profitable.
Is there a rule that when bollinger bands expands… and therefore the volume increase… the trend can only stop and reverse in that direction just after it makes a baloon ? But the baloon can be small or very big anyways… so what’s the poiny using volume if we cannot know from the start how much will be the volume?? :31: