Trading in a trading range

Discussion in 'Strategy Development' started by Joe Ross, May 12, 2005.

  1. "Hey Joe! How do we know when prices are getting ready to break out from a trading range?"

    Trading in a trading range

    When prices are in a trading range, count the number of closes above or below a specific price near the vertical mid-level of the trading range. If 70% of the closes are above the mid-level price and the market can not rally and close above reaction highs, a severe correction may be imminent. If a market breaks and can not close below reaction lows, then expect a rally to carry prices above the reaction highs.
    Example > Let’s assume that a futures chart is showing that about 90% of the Closes are above 445.00, yet prices cannot Close above 455.00. If prices finally do Close above 455.00, a strong buy signal would then be in place.

    Another way to determine that prices are about to breakout of a trading range is to note if you have a 1-2-3 followed by a Rh (Ross Hook) within the trading range. If both are present, the percentages favor a breakout to follow and entry by way of a TTE (Trader’s Trick Entry) is acceptable.

    A 1-2-3 formation followed by a RH is a consistent objective chart pattern for defining that a trend exists. Once the point of the Rh has been violated this pattern is enough to establish that a trend does exist.

    Joe Ross
     
  2. John47

    John47

    Interesting info, joe, thanks. I've read some of your stuff and I find it insightful...keep up the good work.
     

  3. can u give us chart examples
     
  4. You have to buy the book!:p