Trading within a range

Discussion in 'Trading' started by arzoo, Jan 14, 2003.

  1. arzoo


    What indicators do you trade with when the market is within a range?

    I've been having a difficult time learning how to get the feel on timing as to when to sell at the resistance/buy at the support when issues are within a range.

  2. Strictly the tape (NYSE) and intra-day chart
  3. Here's another question...

    what do you consider to be resistance and support?

    What indicators are you using?

    Are your indicators compatible with your method of setting what is resistance and support?

    To answer your question directly...

    after I recognize the markets is ranging , consolidating or in a tight-trading range...

    (notice how I don't put a lot of emphasis on an indicator telling me the above)...

    I use Stochastics which is a good basic range indicator.

    Note: Stochastic sucks for trending will move higher and higher while overbought or lower and lower while oversold.

    Also, don't go into your trades thinking SELL at resistance and BUY at support...

    because you need to be flexible enough to recognize when to BUY at breakout above resistance and SELL at breakdown below support.

    Once again...what do you consider to be resistance and support?

    Some traders base their s/r on prior days info...some only on today's intraday info...others on both...some on price action only...others on indicator action...

    No easy answers to your question.

    Also, explain more detail about how your trading and others may be able to respond with more helpful info than my post.

    P.S. Good ranges today...a few good breakouts and a nice Spike & Ledge pattern that followed the ranges in the Eminis.

    ChartPatterns and HardRightEdge have some excellent graphs and commentary about basic price pattern may want to explore those website for learning how to recognize trends and ranges...

    Good stuff for any beginner, struggling trader or advanced traders.

  4. arzoo


    basically, I trade nasdaq stocks on breakouts/breakdowns . But I have noticed quite a few days like today (Jan 14) when the nas basically stays in a range.

    After a couple of moves or so within the range I kinda am able to spot that the nas is in a range (like within 10-20pts back and forth). however, all i've got to so far to figure out if the issues are moving up or down is the ticks and weights of the bids/offers.

    But I kinda dont have confidence on just going on that, which is why I'm trying to find a better 'indicator' or hint that the next move is a certain direction.

  5. dbphoenix


    What about the chart itself? If you're not making higher highs or lower lows, you're range-bound.

    No indicator is going to tell you what the next move is going to be. Sounds like the first step is to figure out where you are right now.

  6. Stochastics was never meant to be used for trending markets, but I believe it can be. When you see that stochastics tends to stay overbought or oversold that basically tells you that you have a strong trend. The only way to use it then is to wait for some divergence and go countertrend preferably when a major TL is broken as well.

    I do use stochastics to tell me how strong a rebound from a pullback can be or if it makes sense to enter on pullback, but that's a different issue. My point is simply that you can find more uses for the stochastics than the standard ones.