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Range Bound or Trending - The Best Way Traders Can Determine Market Conditions
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Range Bound or Trending - The Best Way Traders Can Determine Market Conditions

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http://marketgeeks.com - Visit our website for more stock trading tips! …

http://marketgeeks.com - Visit our website for more stock trading tips!
This Market Geeks video describes basic factors to help traders determine if markets are trending or are range bound (choppy). Simple visual analysis as well as basic technical indicators are discussed.


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  • 1. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 2. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 3. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 4. GOVERNMENT REQUIRED RISK DISCLAIMER:FUTURES & FOREX TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGEPOTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TOACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND FOREX MARKETS.DONT TRADE WITH MONEY YOU CANT AFFORD TO LOSE. THIS IS NEITHER ASOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR FOREX. NOREPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TOACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEB SITE.THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOTNECESSARILY INDICATIVE OF FUTURE RESULTS.CFTC RULE 4.41-HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVECERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD,SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THETRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, CERTAIN MARKET FACTORS,SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL AREALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OFHINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR ISLIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 5. Why it’s important todetermine if markets are trending or choppy? Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 6. 1. Some indicators do not work well in choppy market conditions.2. Some indicators do not do well in trending market conditions.3. Before trading breakouts strategies, make sure markets are trending.4. Before trading reversal strategies, make sure markets are choppy or range bound. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 7. Follow the rules and don’t get run over by the angry train. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 8. 1. Look at the chart visually without any indicators.2. Look at the slope of the trendline.3. Trending markets usually have a slope greater than 20 percent either upwards or downwards. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 9. The first thing to do is to check the slope of the trendline. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 10. Price resumes trending quickly after each pullback. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 11. 1. Choppy markets trade mostly horizontally without much of a slope or direction.2. Prices drift back and forth, between the upper resistance line and the lower support line.3. Often times this is called trading channel. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 12. Prices are sluggish and markets slowly drift. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 13. 1. Another way to determine if markets are trending or range bound (choppy) is to use technical indicators.2. A simple indicator to determine if markets are trending is a 20 period exponential moving average.3. Exponential moving average is available on all popular technical analysis programs. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 14. Microsoft above 20 bar exponential moving average. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 15. Intel below 20 bar exponential moving average. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 16. 1. Oscillators work well when markets are choppy and range bound.2. Oscillators measure overbought and oversold market conditions.3. Do not use oscillators when markets are trending. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 17. 1. A solid oscillator to measure overbought and oversold levels is the Relative Strength Indicator.2. When the RSI indicator reaches 70 or higher, it indicates overbought market levels.3. When the RSI indicator reaches 30 or lower, it indicates oversold market levels.4. For short term market swings, use a 5 bar RSI time frame period. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 18. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 19. Before using technical indicatorsdetermine if markets are trending or choppy (range bound). Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 20. Thank you for watching the lesson. Check back weekly for new videos!Visit Marketgeeks.com for professional trading education. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.
  • 21. Copyright © 2007-2013 Market Geeks, LLC. All Rights Reserved.

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