Trend or Range Day?

Discussion in 'Trading' started by cotton2, Jul 2, 2007.

  1. cotton2



    How does one determine, or what tools do you use to determine if a market might be a trend or range day? I have heard of people talking about it before, but was not sure if it is possible. If so, does it apply for all markets, or only a few? Thanks in advance for your responses.
  2. 1. Preceding conditions/ingredients such as a narrowest range in X number of days. Price follows volatility.

    2. ADX (default) below 20

    3. Bollinger width tight.

    4. Chart pattern of the underlying index. Triangles, graphically, must resolve.

    5. Seasonal factors (such as the week before expiration or the beginning of the month).

    6. Clues as to whether the ax is net long or short and apt to move away from his basis. Trend up is disposal of paper.

    Potential entry day:

    Opening range breakout (or breakdown).

    TRIN <.90 (or > 1.10). Not imperative but the wind at your back.

    Low made first transcends to high made first (or vice versa). Gap can be obvious or a headfake.

    Catalyst used as an alibi. Generally a news item (valid or fluff)
  3. insert


    what i love about stock market is that noobs who think they know trick other noobs into false perceptions

    wow just

  4. Quite the mouth for troll behind a screen. Is THAT your lot in life?

    Given you've been "here" all of a month, isn't it the pot calling the kettle black?

    Do YOU even trade? Or is it that's skool's out, son?
  5. Pre holidays are usually slow - range as well.
  6. It probably only applies to the markets being traded by those that said it.


    Also, I like two of the things efficiency had said because they are true (#1 and #5).

    #1 deals with Volatility Analysis while #5 involves Market Seasonal Tendencies.

    There are others not mentioned but the above is enough to keep someone busy for a few years.

    Regardless, your going to need historical data to statistically verify whatever you may find.

    Start by researching all the trend days of your trading instrument to see what they have in common and do the same for range days.

    It's a ton of work but worth it at the end.

    (a.k.a. NihabaAshi) Japanese Candlestick term
  7. insert


    Mr efficiency- not

    take my words and learn from it, I can be your daddy both for the market and biologically :cool:
  8. Personally, I think that the best way to distinguish between a trend day and a range day is to look at the price action at the end of the day and then make a retrospective observation. That method is spectacularly accurate and reliable. OK, that's the past.

    Dealing with the present, I think that simple observation is the best way to determine if a market is presently either trending or in a directionless range. This method is about as good as the first method I proposed, up to and including the last price bar observed.

    As for predicting whether the market will trend or range at a future point, that is where simple observation tends to degrade rapidly by comparison. Some people resort to indicators for comic relief as they grapple with the uncertainty of trading markets whose price action cannot be predicted in any meaningful way. (Responded to appropriately, perhaps, but not predicted with any meaningful accuracy or reliability.)

    Just my CDN$0.02.
  9. jim c

    jim c

    I think #s 1 thru 6 are mostly true. The only reason I think this is because I have more or less read the same thing over and over for better than 10 years. Inside day, NR7, ORB. I have studied Crabel till my balls turn blue. I guess I am just looking for some proof. Does ANYTHING really predict a trend day? Can anyone REALLY provide statistical evidence that a trend day can be predicted? I read most of your posts and it seems you've traded the same way for a while and your still around. I guess if you have something statistically significant you wouldn't be so quick to share it. Thats understood. I guess Im looking for something other than "well NR7 works" or "trade after an inside day". I have looked for 10+ years and sadly haven't had much luck with it. Throw me a bone or a hint. Please dont take this as condescending...its anything but. thx jim