How to tell if the pair is going range?

Trading Discussion
1

guys… i like to use bb + sar to follow the price movement but it sucks when the pair is ranging. what indictors or anything that i can predict a possible range is coming?

2

what the hell are you talking about dude?

3

I’m no expert on BB’s but I thought that when the bands narrowed it was an indication that volume/liquidity was lessening and therefore likely to range. But again, I may not be right about this. d

4

Read my post here (about halfway down the page) with the description of ADX:

http://forums.babypips.com/free-forex-trading-systems/4976-parabolic-sar-thats-all-184.html

Nothing is going to tell you that a pair is GOING TO RANGE but this will most certainly tell you if a pair is ALREADY IN A RANGE. Having said that ADX will indicate to you when a trend is ‘running out of steam’. Whether or not the end of the run results in range or a reversal of the trend remains to be seen. In other words: a pair does not necessarily range when the trend ends (if that make sense).

5

what about if it stops at a previous swing high/low, and rejects off it or fails to make higher highs or lower lows… ie… its range bound.

Its either trending and making higher highs and lows or it isn’t…

the best indicator for this information ISN’T and indicator IMHO.

6

Good morning all,

daedalus:

Thanks for that input. You could also be right.

Let me put it this way: this seems to be one of those questions where there is no definitive answer (in my opinion anyway and no offense meant). I have myself tried and seen other attempts to determine whether a pair is ranging or not in an effort to keep out of the market if you’re using a trend following indicator like Parabolic SAR for instance. For some or the other reason nobody seems to get it right and that’s why so many people (myself included) have lost a lot of money using trend following indicators in a range bound market. Even ADX falls short here in my opinion (mainly on forex pairs I must add i.e. it’s a lot more ‘accurate’ on stocks and commodities) i.e. by the time it’s reacted (for the most part) the pair has already changed it’s ‘stance’ as it were. If there were a definitive and ‘sure’ way to indicate the presence or absence of a range bound market then I can tell you that anybody using a trend following indicator (again, like Parabolic SAR) would EVER go wrong. The definitive and ‘sure’ answer to this could very well be a ‘grail’.