J.E. Forex Identifying Market Conditions

-

Trending
This is easy to spot. Price is pushing strongly in one direction, in waves. These waves form Higher Highs and Higher Lows (Uptrend) or Lower Highs and Lower Lows (Downtrend). We only take entries in the direction of the trend, for maximum probability of a win. It is a profitable market.


Ranging
Price is moving both up and down, bouncing between a strong support and a strong resistance. There are mini market structures within this range - at points you may see small Uptrends but also small Downtrends. In a ranging market you can take either buys or sells, as the market has the capability of going in either direction. It is a profitable market.

A range of 25 pips on UJ, like in the image above, is plenty because it is slow moving and you can see the mini structures within the range, whereas a range of 25 pips on a faster pair like GU would be bad, and would look more like a choppy/ consolidating market.


Choppy/Consolidation
In a choppy market, or a consolidating market, price moves in a very tight range so it seems as though it is moving sideways. This is different to a ranging market because a range is big enough for mini market structures to exist within it, and for the market to still be readable. Choppy/consolidating markets have no clear direction and move sideways. This is not a profitable market.


You can see how consolidation is similar to a range, the main difference is that ranges can be profitable, they will have clear directional waves and structures within them. In contrast, in consolidating choppy markets, price direction is not clear and the waves are often very sideways moving, in fact sometimes price may move completely sideways with no waves at all, as you can see on the h4 chart below.


Summary
  • Trending - HHs/ HLs (Uptrend) - LHs/ LLs (Downtrend) - Take entries in the direction of the trend - PROFITABLE
  • Ranging - Price bouncing between a main resistance and support - Still has clear structures and waves within the range - Can take entries in either direction - PROFITABLE
  • Consolidating/Choppy - Tight, sideways movement with no clear direction or clear market structures - NON PROFITABLE

Comments

Post a Comment

Popular posts from this blog

Kokology Questions & Answers

-
[These are extracts only, to see the full details kindly purchase the original book] Kokology is the study of kokoro (Japanese: 心) which in the aforementioned language means "mind" or "spirit". ... The books were published in 1998 in Japan and became a Japanese bestselling phenomenon. The books were translated and became available in the United States in 2000. Below are some questions and answers for sharing: A Desert Journey Boring class settings, you drifted away and enter the eternal desert... 1. You are riding a camel and you are near exhaustion, what will you say to the camel? 2. Before you die of thirst, a traveler point to you a oasis, who is this person you know? 3. You finally come to your destination which is a town, what is your feeling? 4. After you dismount, another person took over, who is this guy? - 1. What happened when love is lost? 2. Who always help or comforted you? 3. What is your feeling after getting past lost love?...
Read more

Neuro-Linguistic Programming Models Summary (02 of 14)

-
GeneraliSation The The Meta Model generaliSations make explicit the way we summarise and categorise our experiences. Generalisations are basically the rules we use to manage life. There are usually exceptions or counter examples to rules. These rules and categories create self-imposed or company wide limitations. Examining these limitations is a powerful problem solving strategy. By generalising one or a few experiences, we can figure out what to do in a different experience. We learn to drive a particular car, and then use that experience to drive a new one. If we weren’t able to generalise, we would have to learn how to drive all over again. Problem Solving Examining categories and generalisations is an excellent creative problem solving strategy. What are the experiences that come to mind when you think of money for instance? We typically use an emotionally charged experience to stand in for all our experiences in a category. We generalise and categorise all kinds ...
Read more

Neuro-Linguistic Programming Models Summary (11 of 14)

-
The Inner Hero Pattern Beat the drum and let the poets speak. This is the day of purification for those who Are already mature and initiated into what love is. No need to wait until we die! There’s more to want here than money And being famous and bites of roasted meat. --Rumi Life can be lived in many ways. You can make it about making money or winning at all costs, or pleasing other people, or perhaps never standing out. Or you can live your life as a great journey of consciousness, one filled with many challenges and surprises, one that makes a positive contribution to the world. I want to talk here a bit about these different paths, emphasising that the Self-Relations approaches of Generative Self and Generative Trance are especially tools for supporting the latter path. Life as a journey has been described by many people, most notably the mythologist Joseph Campbell.  Campbell (1949; Gilligan and Dilts, 2009) studied the stories of many different cultur...
Read more