How to avoid these situations?

torofish · Feb 21, 2009

Background info: it's YMH9 on 17/02/09. One minute interval

I attach you with two files that show go-no-where prices.
The question is

Is there any indicator that tell you that it's sideway?

Using the longer picture.

I now use ADX but it's not that clear.
ADX can tell whether it's not trending but I'm not sure they can tell the breakaway.

In the longer picture, Stochastics does make many failures

Please suggest me some indicator or strategy to stay away and forecast that it's about to really take a side either up or down.

Thank you :clap: :clap:

torofish · Feb 21, 2009

here are the files...why they didn't attack in the question...

bnaimy · Feb 21, 2009

torofish said:
here are the files...why they didn't attack in the question...

use multiple timeframes and get a better sense of the direction price is going.

Also use support and resistance to know where price will flatten out.
If you want a indicator, then use a DMI(Direction movment index) use it on no lower then a 3min chart.

There is not a single answer to this question , but finding out when price is sideways, should be pretty easy if you have enough screen time.

I wish i could write a more comprehensive method on how to know when its sideways, but i am pretty busy now. I might write a better answer tomorow.

But its pretty easy.

Regards
Bashir Naimy

new_trader · Feb 21, 2009

torofish said:
Please suggest me some indicator or strategy to stay away and forecast that it's about to really take a side either up or down.

My suggestions:

An indicator: There are none. Avoid them all, and I mean ALL OF THEM.
Strategy: Hard work, Study & Practice and you will get better at forecasting price movements, but this doesn't mean you will make money though. That is another issue altogether and requires work on yourself.

foredog · Feb 21, 2009

Two big indicators, YOUR EYES

If you can draw a line along the tops of the candles and another along the bottom and they make a narrow channel the it's on a range

new_trader · Feb 21, 2009

foredog said:
Two big indicators, YOUR EYES

When they cross is that a signal to go long or short?

luckyd1976 · Feb 21, 2009

It's an Art not a Science

shadowninja · Feb 22, 2009

foredog said:
Two big indicators, YOUR EYES

If you can draw a line along the tops of the candles and another along the bottom and they make a narrow channel the it's on a range

Snag is, by the time you can draw this channel, you've already taken 2 losing trades. Maybe.

foredog · Feb 22, 2009

shadowninja said:
Snag is, by the time you can draw this channel, you've already taken 2 losing trades. Maybe.

You're right in the above example.

Woud any indicator prevent this though?

I was talking in general, not just about the chart posted.

either wait so you can draw a channel, and then you will (hopefully ) get a clean break

or

trade with close stops testing the market for that break, maybe a few small losses but hopefully a big winner to offset it.

shadowninja · Feb 23, 2009

foredog said:
trade with close stops testing the market for that break, maybe a few small losses but hopefully a big winner to offset it.

There is that... danger is potential negative emotional sum with repeated fails for a newbie or not letting the final winner run to make up the loss.

neil · Feb 23, 2009

Ranges

shadowninja said:
Snag is, by the time you can draw this channel, you've already taken 2 losing trades. Maybe.

Yes - but on such small time frames it should prevent you from a death by a thousand cuts - so a couple of losing trades is the price to pay for stopping you bleeding away capital whilst looking for trades with "legs"

new_trader · Feb 23, 2009

Foredog, pay close attention to what both shadowninja and neil have said. Trading with tight stops isn't to be used as a methodology which relies on 'guessing' until you are right. You must have a full and deep understanding of what you are doing which takes (and continues to take) months and months of study and practice to become proficient. It IS discouraging to have many small losses and they can and often do prevent one from having the courage to take the next trade. Tight Stops limit losses until you are proficient with your entries. Entries are CRUCIAL.

alphamaster22 · May 19, 2009

Try the ATR, average true range, usually very low in sideways markets, and then a large ATR spike upwards when there is a breakout in either direction.

How to avoid these situations?

torofish

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torofish

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bnaimy

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new_trader

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foredog

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new_trader

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luckyd1976

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shadowninja

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foredog

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shadowninja

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neil

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new_trader

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alphamaster22

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