How do You decide Range or Chop?

Discussion in 'Technical Analysis' started by BobbiDigital, Oct 3, 2012.

  1. So I've heard by many on E.T. that they use different strategies for different day types. By that I mean is the market trending or chopping/ranging.

    Currently, I watch the first 5 minute bar type, and the first 30-60 minutes a la Market Profile to formulate an opinion.

    Does anyone have a more technical approach or thoughts they would mind sharing? Maybe the first hour it's 10 minute bars with higher highs and lows is trend or alternating red/green bars of equal size may imply chop.

    Mostly curious if anyone does it from a technical standpoint or if it's more feel.


  2. syztrader


    Market bouncing back and forth between S/R with lots of long shadows means chop. If it's trending you'll see the S/R broken and some solid bars. Also, if you use a indicator most will go flat during a sideways market. Stochastics will be flat, moving average flat etc.
  3. ammo


    yesterday was chop as the uvol dvol changed leads several times throughout the day
  4. ammo


  5. I ask Al Brooks what it was after the close and act accordingly.
  6. Range bound and chop are the same aren't they just a matter of time?

    Please advise.
  7. Handle123


    I prefer to use John Hill's "Thrust bar" where one bar has leaped into a direction, and also using an EMA, so that the Thrust bar has moved away from the EMA. If EMA is cutting through middle of handful of bars, this is chop. EMA sloping and only touching like the bottoms of bars is clear sign market is UP trend. Often times Thrust bar is the bar breaking trendlines and chart patterns but must close in the 25% away from trendline. Not all trendline breakages are the same as many are areas of hitting the stops to entice inexpereinced to take a position only to assume slippage, breakeven and of course losses when it is a false breakout. Often times, the second move out of the Price pattern offers reduced risk and more definitive direction.

    Two books by John Hill written in late 70's, Stock & Commodity Market Trend Trading by Advanced Technical Analysis and Scientific Interpretation of Barcharts are best books around on Price Action, most of the charts done freehand.
  8. ammo


    you can fade a high or low in chop and catch the reversion to the mean,you can't fade a trenday ,pick bottoms or tops,it's the contrarian traders nemesis ... sorry misread that
  9. Use range bars.

  10. I'm feeling generous.
    Mathematically accumulate the momentum from the 00:00 time. If peaks by NYSE open then you are good to go to bet on trend. If peaks at Noon (give or take +/- x hrs, reduce/increase bet size) then it's a good bet for failed trend. See today.
    #10     Oct 3, 2012