Hi everyone
My question is; how do I identify a ranging market as quickly as possible and what is the best strategy for trading it? I have been demo trading for about 3 months now, and I just started this moving average cross over strategy… which in my opinion is used best for a trending market. It has been working quite well until I lost 30 pips in two consecutive trades today only to realize that the market is ranging already.
Guys i need your help on this so that i dont get caught up constantly in this mess.
Stifled, contained market moves, easy to draw some S/R lines (numerous touches without breakouts). Calm news backdrop. Ranges become clearly visible after trend stats, that’s the major problem.
MA’s are more than useful for identifying and quantifying a trend but cross-overs are poor entry signals.
Its subjective and can be misleading to go into a detailed chart and try to confirm a range but you might be able to come at it a bit laterally. For example bars in a range will be repeatedly intersected by a MA. MA’s in a range will repeatedly cross. Bunches of MA’s in a range will rarely order themselves from shortest to longest or vice versa. Bars in a range will overlap greater numbers of preceding or immediately preceding bars. etc. etc.
The more of these criteria you confirm, the more useful the chart formation. TA is more about usefulness rather than accuracy.
1 Like
Thanks for the clues…but the point that you said MA isn’t a good entry trigger…please can you help me shed more light on that
Exactly my point, before I realize it’s a range, a new range has already formed especially since am trading on a lower time frame
Oof I relied heavily on this for a while. 
Hello , good day
Hi good day
Are you on Google Hangouts?
1 Like
Many traders say that cross-over signals are inherently late but this is not the true picture. The actual hard truth is worse than that - the point in time at which the cross-over occurs has no relation to the current price level or very recent price action.
So as the problem is not late signals, the solution is not earlier signals. In trying to secure earlier signals many MA cross-over traders will use shorter and shorter MA periods, or shorter and shorter time-frames. But they still fail because they have been solving the wrong problem…
Hmmmm…I think I really need to digest that, but what’s exactly do u think is the right problem to solve then?
What time frame are you trading? On the H4 there is a lot of market noise (in my opinion). On the D1, identifying ranges may be easier.
Try going thru Pipsology again. It explains ranges pretty well.
I use 4h to identify the main trend but I place my trades on the 15 mins chart
M15? That’s not my kind of party. haha
But I suppose a range is a range. But a chart that fast will have so many varying factors.
As you learn the M15, I think you’ll have to try to learn the nature of that time frame.
How does it behave? What do the breakouts look like? How wide must the SLs be?
Go back to Pipsology, bro. Maybe after that, try to learn more about ranges, specifically. There’s a book called “how to trade a range”. This book taught me how to trade ranges. Look for it online. It’s a short book, but worth the money.
But basically, once you see 3 bounces it creates a zone. That’s your range.
1 Like
Thanks bro
1 Like
Ignore MA crosses. Pay attention to the MA slope directions, the MA vertical sequence, how many times price has crossed and re-crossed each MA, how flat in pips the MA is etc… But your primary source of information is price.
Don’t lose sight of the statistical fact that the next thing price in an uptrend will probably do is rise. And if it doesn’t do so immediately it will more probably do it soon rather than fall.
Thanks. That was helpful
Yes, I agree. Trading MA is for trends. In a range, following the MA will chew you up. MA is irrelevant in a range. But it can be helpful when breaking out of a range.
When you’re in a range, those R/S lines are your guides. But once you enter the trade in a range, don’t touch it. DO NOT TOUCH IT. Set your TP, and leave it alone. If you want to be conservative, set your TP for 75% of the range height.
It could take longer than expected to hit your TP, but don’t close that position. Either get stopped out, or hit your TP. But don’t close your position early. That’s my suggestion.
Your profit will go up, then could go down to 0. If that happens, do not close the position. Just leave it, and let the trade run its course.
1 Like
Waoh!!! Good tip, thanks