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

  1. Two things I had considered

    ADX or/and the slope of moving averages.

    However, i have absolutely no experience with technical indicators so any help is deeply appreciated.

    Thank you much for your time.

    FoN
     
  2. The Holy Grail itself.
     
  3. i've found the most useful tool is my eyes.


    kiss.
     
  4. That's unfortunate since everything else I can find in price.

    Guess there really is no use for indicators then, not trying to start a battle, just an objective personal observation based on my criteria.

    FoN
     
  5. Indicators can help you to interpret the price, especially with mechanical systems.

    Discretionary trading is a totally different beast and you should be able to spot chop without any indicator.
     
  6. if you have to use an indicator if analysing 100's of markets at a time, then id go for bollinger bands given the underlying maths your trying to id is price moving < 1 sd.

    bb's can also be translated into an oscillator, meaning you can set an alert should a squeeze come about.
     
  7. The thing you're looking is what all technical traders are looking for. So expecting to find it in the public domain is naive.

    Are all indicators useless? Maybe all the publicly disclosed ones are. But there are proprietary indicators that will consistently find trends and some of them may even be blackboxes for sale (e.g., Composite Fractal Behavior). So expand your search beyond the free stuff and you may find what you're looking for.
     
  8. If you want something to give you a sense of market sentiment that is not that indicator I would try a Renko style chart on a daily setting with a box size of the 14 daily atr.
     
  9. Use slope of regression line.
     
  10. One problem with many of the methods commonly used to identify trends is that risk confuse trends with volatile markets. The method described in the paper below claims to avoid such problems.
    http://www.eurekahedge.com/news/attachments/Amplitude_Examining_Trend_Characteristics.pdf
     
  11. "The TI(n) for a specific time t is calculated by doing a linear regression on the n minutes around t (n/2 before t and n/2 after)."

    Oops. There goes its applicability to trading, which is a real-time application that naturally doesn't allow peeking into the future.

    IMO the best public domain trend indicators are still Kaufman's Efficiency Ratio and Blau's TSI, but of course they have their flaws as well.
     

  12. [​IMG]
     
  13. All you eyeball guys crack me up. Try doing that for scores of instruments every trading day for the rest of your trading lives. There's a reason why machines and other technologies are sooo popular world-wide.
     
  14. Ya if i want to know the trend or lack of I just look at the timeframe im trading and draw some channels using my eyes, nothing will ever top that.

    I get it....


    Now try it for thousands of instruments :)

    FoN
     
  15. Is it possible not everyone watches scores of instruments?
     
  16. Of course. In that case, the eyeball works great without danger of overworking it. But not everyone watches only a single instrument either.
     
  17. Well, trend indicators needs some kind of window over which the trend is calculated. They just state that the trend estimate is calculated for the center point of the interval. It is trivial to adjust to only use historical data points and use the regression estimate as an indicator. The big concern is whether at all this indicator could say anything about the continuation of the trend.
     
  18. Channels on the timeframe you are trading.

    Anything else is inferior.

    Crazy A
     
  19. I totally agree.
    Here's where they lose me. It seems senseless to decide to include an arbitrary point (e.g., the center point) in a linear regression. Frankly I question the whole logic of using a linear regression, given that the vast majority of trends are nonlinear, but maybe that's just me. Fortunately there's more than one way to approach the measurement of trends. :)
     
  20. OK I agree. Have done some basic tests with this indciator and it gives good indication whether the market HAS been trending, at least my eyes seems to agree. So you could calim it solves some of the problem that other trend indicators have.

    However, as I said before, I really doubt whether this is actually useful when determining if the trend will continue.
     
  21. apply that to 3 or 4 markets and you have the trend and the turns
     
  22. Ammo,

    Can you give some an examples ?

    You mean like ES/DAX/EURUSD/GOLD?

    FoN
     
  23. djt,eur/usd. dx,xlf lately....djt is a great tell for the es, and if you see the nq,dow,dollar,eur,any of em hitting supp/res in there channel you will often see the es or what ever instrument you are watching turn before your target,djt likes to smudge the lines because its not that liquid,break a tl for a day or 2 but not go anywhere ,while the es rallies further ,you know it's done...divergence between instruments instead of indicators.. watch the uvol dvol ratio ,it only make s 5 patterns,tells you trend day,chop ,reversal,grind up or down and sideways,,,gives confirmation,nonconfirmation on the above divergences
     
  24. screen hours
     
  25. It's important to have proper context.

    I use oscillators and Keltner channels to determine what's trending and to what degree.

    With oscillator crossings I qualify swing tops and bottoms. This, with overlay of Keltner reveals a structure.

    Price's relation to qualified swing turns and position in relation to K bands gives a pretty good idea of presence or lack of trending. This technique is also helps in comparing various issues for the same purpose.

    This in a nutshell, there are endless other ways to examine how likely the trend is going to persist once one has a practical structure for it.


    Regards,

    222bc
     
  26. Lots of different answers and there's a very good reason for that as almost any indicator will give you clues in advance if not concurrent with PA to confirm potential trend conclusion/reversal or consolidation/chop. It's a matter of becoming expert at reading your chosen indicator.

    Same goes for PA alone and PA/Volume. Looking left to see if PA is traveling into an area of over supply warn you that chop/consolidation is to be expected and running or gap opening through low supply tells you PA is in trend territory. The Float used to be all the rave when it was first published while Wyckoff saw that 100 yrs back.

    Others have mentioned structure and again pattern break outs, wave completion, Price ratio relationships, Channels etc. give strong clues.

    Combining both PA structure + PA/Volume with Indicators & multiple time frames gives the highest odds of reading a trend movement from a low time frame into the highest time frames.

    Everyone gets 10/10 :)
     
  27. your mind is a good,it see's and here's more than a limited indicator,trust it ,when it see's correctly more often than not,trade with it using caution when wrong
     
  28. HughRobi: Analysts that attempt to Trade have to go through THE EXECUTION. (Where most of them get shot). hehe. :D
     
  29. Bollinger Bands are very useful in this instance.

    Look for a bollinger band squeeze which is when consolidation happens, i.e. the bands are very close together. Try using a simple 20 day Bollinger with 2.0 standard deviations.

    Bollinger band squeezes also signal a period before the prices regain volatility.

    You can also add Bollinger Bandwidth to your charts to make it easier to define the periods of high and low volatility.

    CL
     
  30. =================
    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. 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. 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. 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. 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. 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. 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. 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.