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Hey all,
I've been considering (still) different ways of looking at narrow range days / consolidation / chop. If I'm able to see this on the chart as it's developing, I'll change my trend trades to some smaller target scalps.
Attached screenshot shows regression channels of two periods.
What if we look at a levelled off longer period of the channel vs. a smaller term channel and see if the quantity of ranging bars inside show the consolidation. I'll be trying to create a zone at each channel line with barcounting to see if it has recently "wanted" to test the channel edges without adventuring beyond and breaking out of the channel. Then when it reverses back to the opposite channel line and the longer term channel remains relatively flat, we're in consolidation.
looking at daily chart it's impossible to know how a day going to turn out, you could pick up some level 15m OR, 30m OR, 60m OR then if it stays inside your range then you call it narrow range day but it may not be narrow range for someone else.
hi zeller!
i think there is a missunderstanding in your Q!
Do you really want look to detect narraow-range full-days in advance ?
or do you look how to detect a range / chop mode intraday to change or adjust your trading-style + targets for this zones ?
i understand it more that you mean the second possibility.
if so - another idea would be to change to cycle-mode-trades instead of trend-trades - have a look to our discusion here :
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 …
but of course this didnt answer the Q of the detection / definition of a ranging zone wich is the harder thing to catch
I've read through the cycle thread you posted, need to re-read...
Yes, I want to change my profit targets to tighter scalping trades when I see it moving into a ranging scenario. I know you can have the narrow channels even when the channel lines are above a certain slope so I'm not sure yet the best way to tell me to change to a scalp.
I'll check again your post #8 in the cycle thread.