There are plenty of various indicators available to provide you with the trading signals. For the sake of this discussion let's group them in two categories:
1. Oscillators
2. Moving Averages
Each of these categories has its own distinctive advantages and disadvantages:
1. (Osc) Excellent performace in ranging (cycling) markets, very poor performance in trending markets
2. (MA) Very poor performance in ranging (cycling) markets, excellent performance in trending markets
The ambition of every trader is to find something that could work well in both conditions (trending and cycling). But in most cases our efforts are futile - and this is especially the case of automated strategies when strategy might work perfectly well one month and completely fail the following month when market conditions change.
Some try to combine both oscillator type and MA type of signals in hope this will give the strategy the right edge. But in the end in most cases those signals seem to be incompatible.
What I want to suggest for the discussion in this thread is the following:
The best methods to identify in which mode is the market ("Trend Mode" or "Cycle Mode" or "Random Noise Mode")
As a starting point - a screenshot of some of the indicators which are part of MESA8 system which deal with exactly this problem.
In the first panel below price panel - cycle mode is when the red line is inside the channel (outside - trend mode).
Second panel - below treshold is trend mode, above cycle mode.
Third panel - red: trend mode, black: cycle mode
(for full description and other screenshots: Home ( ):
As I expect (or rather hope) the discussion will involve some technics and indicators available in Elite Section (like Wavelets) I start this thread in Elite Section.