What's a good tool to determine if the market is trending or consolidated ?

Discussion in 'Technical Analysis' started by FreakofNature, Sep 1, 2011.

  1. =================
    Hero Demo;
    :D 50 day moving average can help measure a down-trend, an up-trend;
    or a sideways trend[consolodated /sideway/slop trend.]

    Many years of price data recordings can help also;
    some gamebirds avoid getting shot by flying 50+ mph.
    Some gamebirds take note of a 50 day season [executions]:D
    #31     Sep 12, 2011
  2. the1


    I programmed a volatility indicator that's based partly on the ATR. The ART by itself isn't a bad tool. When this indicator is rising, or high it's more likely there won't be a trend. When it's low or falling it's more likely there will be a trend. The market can switch behavior in the middle of the day. It's fairly common for the AM session to be a non-trend with the PM session to trend. No Holy Grail but a useful tool.

    Pay attention to the gaps up as well, especially in a bull market. If the market gaps up high it's likely to be a buy all day market. Large gaps down can go either way. A quiet trend can develop of you can get a lot of bounces within a trend, which was the case today.
    #32     Sep 12, 2011
  3. the1


    I find the 20,3 useful, especially in a non-trend day. If the market corrects downward after a nice move up (2 hours or more) and touches or comes close to the BB it's highly probable the market will reverse on that touch or at least give you a tradeable bounce off the 20,3 BB. On non-trend days outliers within a given time frame make good fade opps. Some number crunching is required. Simple BB watching isn't enough...imo.

    #33     Sep 12, 2011
  4. I like to try a trade or 2 in the direction i think the market is trending. If i get stopped out i wait for confirmation of said trend. Otherwise i go do something else. Im not a chop trader but thats just me.
    #34     Sep 12, 2011
  5. sandoxe


    Agree. I use stochastics to enter a trade and Macd for trending. It's interesting how the mind sees and recalls past formations and applies it to the current visual, projecting a possible outcome........trust is the key word here and obviously use caution, always. :cool:
    #35     Sep 13, 2011
  6. dan1979


    I think trends that are not clearly visible on the charts are best avoided. By this i mean that the higher highs and the higher lows, or vice-versa, should be clearly imprinted on the charts. The method i use to determine trends is derived from the Dow Theory. In an uptrend, if a pivot high is formed that fails to cross the last high, i get on an alert mode - time to switch gears to neutral. And a break below the last pivot low confirms that the trend has changed to negative. Indicators are lagging, and as such, using indicators to determine trend, can make us late entrants.
    #36     Dec 6, 2011
  7. well said dan the new guy! I'm kind of confused shouldn't the question be how to determine distribution vs consolidation? I must ask myself this question 3 times a day and the answer always becomes obvious when the price moves. MP theory try to shed light on distribution vs consolidation but I'm way to dumb to understand it.
    #37     Dec 6, 2011
  8. I draw lines under, and over the price action.

    It's pretty simple to tell if a market is trending by doing that. Just remember, markets don't often trend. They randomly fluctuate most of the time.
    #38     Dec 7, 2011