You need a way to be able to distinguish between signal (genuine trend that tends to continue) and noise (chaser trades that often fail). You get that by experience and study of the characteristics of genuine trends vs choppy ranges.
Price often stays in ranges, where all breakouts turn into headfakes, and trend trading gets you killed. When the market goes from trend to range, you need a way to stop trend-trading and either stay in cash, or start range-trading. You also need a way to know when it shifts back to trending again. Otherwise you'll lose during the one market phase what you made during the prior.
Thank you for you response, taht is basically what has been happening to me in oil now its ranging. I dont know what thes best way to rane trade is though apart from just trying to take off the top and buy up the bottom..
For the fractal you show, there are three places to look: 1. Even harmonic step functions. 2. Linda Rashski (sp) 3. The closed thread called SPM boot camp. There you will see a person who has a chart like yours and an indicator "tuned" to the chart fractal. jahajee may be his handle. What he did was some "tuning" that lets him trade intraday to pick off the turns because he has price and the indicator histogram in synch. reverse engineering or playing with the two variables, fractal duration and indicator non bridging, can keep you in any market and on the right side all the time. If you look at the pennant on the S&P Itermediate term or position trading term, you can get a glimpse of the next couple of days. My comments apply in the sense of having a neutral bias and from the viewpoint of making what the market offers as the offer is made segment by segment. As you see, there are these plateaux and each is followed by a "blow out" series of rapid price shifts. If you just want fast money and only occassionally, you can just trade the blowout period occassionally. the talking heads have a long bias and so they see good (long} and bad (short) days. I do not understand their specific commitment to having to be this way. But it is certainly entertaining on TV. There are some big "blowout" shifts coming up. One may be more related to election polls shifting. as Congress does its thing, there may be some "indictment" "blowout" days as well. News stuff.
Price can do one of the following at any given time. a) dance inside a range b) trend c) do head fakes It is your job as a trader to a) determine which state we currently in and c) react TV PS: did you react to the missing b
Arggghhh this market is really fucking me off ovr the last few days, cos baiscally the only way i could have made money would to have gambled by seeing that the oil and dow have been sliding so much, and so then instea dof accepting that i missed it, i would have had to just plonk on sells then and just hope that the market kept sliding even more oversold. I instead waited till down spikes, and then bough it for the pullback, but it just keeps sliding down and down!