Yes, but it depends on the system selected and so on. And it is difficult and it is similar with big project.

Look at the first posts of this thread for market conditions description.

Some other indicators/systems to estimate/predict the market conditions:

- evaluation of the market condition using six SMA indicators: original public thread.

- how to estimate and predict the market conditions (choppy, trend etc): the post with many links.

- market condition evaluation (incl choppy zones) and prediction using MTF_AbsoluteStrength_v1 indicator: original thread with indicators, live trading results and images; how to use indicator (rules): read all the pages starting from this page till this one.
- signal/histogram version of MTF_AbsoluteStrength indicator with exact rules to estimate the market condition: indicator and links to the post are on this page.

- MaksiGen Trading system (light Paramon): many veriations of the system is here, examples of market condition is in the end of this thread.

Ichimoku chart/system with forecasting possibility:
- thread (with explanation, market condition estimation and forecasting) is here and here,
- some template is here,

Elite section:
- AbsoluteStrengthMarket indicators: indicators to analyze the market condition. Read posts starting from this page to this one.
Or read the thread here Market condition indicators/tools.
AscTrend System.
- M5 asctrend trading system. Elite section system. Based on 3 templates. For trading, or for evaluation of the market condition. Templates, thread (the rules to trade are different and depends on the market condition - posted inside the thread in different posts).

-----------

By the way, the idea to switch EAs on/off automatically based on predicted market condition was fully described in elite section thread namely "EA Switcher". I think this ideas can be realized in RAS version #2.

Hi Traders

Hope you're in good trading condition...
Forex works by making transactions in foreign currencies that are not centered on an exchange like the New York Stock Exchange (NYSE) instead; they take place world wide through telecommunications. The forex trade is open 24 hours a day beginning on Sundays in the afternoon until Friday afternoon. There are dealers to quote all the major currencies in nearly every time zone through out the world. After the investor decides on what currency to purchase, the transaction is made through one of those dealers. Some of these dealers can even be found online. It’s very common for investors to speculate currency prices by obtaining a credit line, as small as $500, to greatly increase the potential profits and losses. The term for this is “marginal trading.”

The term marginal trading is used for trading with a borrowed capital. Many traders find marginal trading appealing because forex investments can be made without using a real money supply. This method allows investors to invest more money with fewer costs for transfer and to open a bigger position with a small capital.

When trading in the forex market, it’s best to develop a pattern of recognition in order to become a successful trader. The forex markets often display a specific pattern that repeats over time across assorted time scales. Forex traders can develop an expertise by acquiring the information around the patterns and then discovering how to recognize these patterns for what they are.

Let’s use an analogy of a medical student who is learning how to diagnose a disease, for instance, pneumonia. Every disease is defined by a distinct set of symptoms. By running the right tests and making ethical observations of the patient in question, the medical student will be able to collect all the information needed to recognize that the disease is indeed pneumonia. A medical student can never become an expert doctor until he has seen a number of patients, thus gaining practice in putting the pieces of the puzzle together rapidly and correctly.

The brightest illustration of gaining the trading expertise is through pattern recognition and the large literature on technical analysis. Many of the technical analysis books look like the books that are carried around by medical students. They attempt to combine market symptoms into identifiable patterns that are aimed to help the trader diagnose the market. Some of these patterns may be chart patterns, while others may be based on identifying cycles and configurations, and so on. Like the medical student turned doctor, each technical analyst must cultivate a level of expertise by recognizing the various markets and by learning how to identify the patterns.

Notice how the pattern recognition and research answers lead to very dissimilar approaches to the training of forex market traders. The traders tend to learn how to improve their trading by doing their research by learning how to use more sophisticated tools, collect more data, expose the best predictors, and so on. However, from a pattern recognition advantage point, being successful at trading will not come from conducting more research. Instead, gaining the knowledge directly from the experts and through a great deal of practice will lead to the solid development of competence. The research viewpoint fundamentally treats trading as a type of science. Like scientists, we gain our knowledge by unveiling new observations and pattern recognition through a perspective that treats trading as a functioning activity. We gain our expertise through our mentors and by constantly practicing the trades.

It would seem that this type of expertise could be acquired by learning pattern recognition from other experienced traders and then attaining the experience well enough to identify them on your own. Traditionally, this is how it’s done, but because pattern recognition normally entails a dependable measure of judgment, it makes it very hard to establish outside efficacy once it leaves the hands of the experts. Simply put, an expert trader may be able to utilize more information in trading than he can actually verbalize. Expert traders often describe their work in terms of monetary value and unpredictability patterns, but it may be the way that the patterns are used that makes all the difference between novice and expertise. Although the experts may be able to distinguish patterns in their work, it remains unclear if their greatness lies in the patterns themselves....

Regards
delca

__________________
Drastically Boost Trading Profits

Hello community.
i have a question about distinguishing current market mode.

let's say i got entry signal from trend/detrend indicators together.
and i've set position as signals indicated.
now i'm getting benefit.

after a while i got opposite entry signal from detrend indicator.
if the market is in range mode. it'll be decent exit signal for my position
but if the market is in trend mode. it'll be whipsaw.

my question is. how do you confirm signals from detrend indicator? (such as cci)

Hi r4bb1t,

You can't. If you find the solution to that problem you found yourself the holy grail on trrading systems. Millions of traders before you have asked that question and waisted years of searching on it.
Some will maybe answer that they use this or this indicator (like adx or damianvolta) to help them in showing the difference between ranging markets and trending markets but all those indicators lag in such a way that you will run after the facts.
They will show you that you are in a ranging market after it is already ranging for quite some time where you will then have the losses on your trend following system.
They will show that you are in a trend after it is already trending for some time where you will loos on your ranging system and miss out on the first signals on that you should have taken according the trend.

The best you can do is go for one certain trading system. Ranging or trend following.
Each choise you make will have pro's and con's.
Impossible to have the best of both worlds.

Friendly regards....iGoR

__________________
Success comes with knowledge. Knowledge comes with experience. Experience comes with time and hard work... (iGoR)
MT Intelligence - Stats for fxigor1

Thanks for your clear answer iGoR.

i use ADX and yeah it's definitely helpful when it's trendy.
although it's laggy as you mentioned.
does anyone have tried by applying John Ehler's measuring cycle period methods?
like assuming when cycle period is low market is in range mode?

Hi Traders

Hope you're ready to take trading knowledge action...

Before you even think about opening a Forex account, be sure that you are familiar with the foreign exchange market’s geographical, functional, and participant characteristics.

Geographical Characteristics

The Forex is a huge market that encompasses the entire globe. This is a market that spans from the United States to Europe, to China, and back. There is no area it cannot touch. This is one thing that makes the market so popular. There is simply something for everyone with the Forex market. It is easily accessed due to it being open all day in every country. Its 24 hour access makes it even more attractive for investors. No matter what time of day you want to trade, there will be someone trading in some distant location around the world. Although there is trading in the Forex in every corner of the globe, the major exchanges are Singapore, Hong Kong, Tokyo, Bahrain, London, New York, San Francisco, and Sydney. The geographical characteristics of the foreign exchange market can help new traders realize the size and volume of the Forex. It is simply unmatched in volume and size. This makes the Forex a powerful tool for investors everywhere.

Functional Characteristics

The entire Forex market functions to transfer purchasing power. This is done between countries. When trades are made, they are allowing partners to convert currency revenues into their domestic currency. When one country’s purchasing power is strong, another country’s may be weaker. It also functions to obtain and provide credit for international trade and to avoid an exchange rate catastrophe. When it comes to international trade, the Forex is helpful because it can help the movement of goods between countries and offer credit for financing.

Participant Characteristics

There are two main parts to the foreign exchange market. The first part is the interbank, which is often called the wholesale market. The second part is the client, which is often called the retail market. Throughout these two categories, there are approximately five different types of participants. The bank and non-bank foreign exchange dealers are those that buy at bid prices and sell at asking prices. This helps the efficiency of the market as a whole. An interesting thing to note is that by trading currencies, banks often make up to 20% of their profits....

Regards
delca

__________________
Drastically Boost Trading Profits

Moneyline has so appropriately distinguished the different categories of market patterns in his/her posting some years back.

Systems specially designed for range trading will go haywire when the market goes into a trend (up or down is immaterial).

Normally, when the market turns choppy or goes into a range, it is in the process of consolidation and choppy when the bulls and bears fight it out; but at some point in time, one side will prevail. According to Elliott Wave approach, they are in the CORRECTION phase.

Correction phase is shorter in duration than trends, as it is only a retracement reaction to the main trend (be the trend is up or down).

Follow the trend is a well given advice given by seasoned traders. Playing corrections are more for experienced traders (not for most of us), as there are many complex correction patterns.

Consolidation is perhaps one of the most confusing and challenging trading environments.

Most new and novice traders still have not figured out that there is a time to trade and a time to stay out of the markets. Trading is not a sprint to quick profits, it is a marathon to build financial wealth.
It is important that you always keep in mind one of the most important rules of trading which is to preserve capital.

If your trading system begins to break down and you experience failed trades occurring with more frequency, but you are staying true to your trading method and rules, this could be a very strong signal that you should stop trading. What should you do when you stop trading?

When I experience changes in the market due to uncertainty and lack of direction, I still show up to my office trading the same number of hours five days a week during the London and New York session however I watch the market without placing a live trade. I watch to see how traders react to economic data and the comments that are made by distinguished market analysts.

This will typically occurred during consolidation.
Consolidation often means different things to each trader. Consolidation can occur on a small time frame yet still show a trend in place on the larger time frames such as the four hour or daily charts. However when there is consolidation that appears even on the four hour or daily charts, its time to be careful. Very careful.

A lack of volume and a lack of commitment from traders can cause price to retrace or reverse quickly, often times before the typical profit targets are achieved in most trading systems.
When markets move sideways inside of consolidation is a good idea to stay out and wait until a clear sense of direction begins to unfold or take shorter profits and prepare to close a trade quickly if necessary.

Realize that by trading in this type of environment you are actually changing your trading strategy and your original plan. This could be argued that it will be difficult to maintain discipline to your trading strategy and you could ultimately affect your performance by unnecessarily changing profit targets and stop loss levels.

So the question is, should you trade when there is a great deal of uncertainty in the markets and consolidation?

Regardless of whether or not you place a trade, it takes the same amount of analysis to determine that you should stay out of a trade that might be against your trading strategy, as it does to find a trade that honors every rule. Your challenge is, do you have a trading plan that includes how you will control your behavior when the markets begin to move in a manner that you are not familiar with?

If you are new or inexperienced with certain types of market environments it may be a good idea to start off with a simple rule that states when you lose more than two or three trades in one day but you follow every rule and price is moving in a sideways unpredictable manner, stay out until you have analyzed where the mistakes are being made and there is a sense of direction and you can gauge market sentiment.

What we are currently experiencing in late June and early July 2009 is somewhat similar to what we all experienced last year in October and November. In the beginning, it takes more time for the majority to accept the reality of change in the markets. Over the past few months there was some excitement as to whether or not we were experiencing a bottom formation in all markets including real estate markets. However in the last three or four weeks, the realization of a drawn out and lengthy recovery is most likely. This realization along with the anticipation of economic data to confirm this type of sentiment could cause markets to move sideways and inside of consolidation before a major move. What is expected by some analysts is a possible retest of lows and almost all markets.

So the question is repeated, should we be trading in uncertain trading environments that could cause us to give back previously earned profits?

Remember, trading is not gambling. It is to be treated like any other business and preservation of capital is one of the most important rules of any trading plan or system.

I present two charts below one of the EUR/USD and GBP/USD1 hour chart.
EUR/USD shows a small break out of consolidation however it immediately ran into the next level of resistance it retraced right back into consolidation.

GBP/USD however shows price remaining inside of consolidation. It may be a good idea to stay out of trading but keep an eye on the charts and watch for the breakout. When it occurs try to determine market sentiment and analyze any economic data that may be available before or during the breakout. Additionally the anticipation of any previous news could also cause a small trending move outside of consolidation so it is just as important to keep an eye on future economic data and what the markets may be anticipating.

my favorite strategy is first to identify consolidation. Because I am a day trader I prefer to be flat at the end of each day. So I know my trades will develop and pay quickly. The consolidation range I prefer is on the one hour chart and usually the overnight consolidation..

Once I see a breakout of this range, I do not participate in the initial breakout move as that often times can lead to head fakes or requires a larger stop loss. I simply let the rally outside of the consolidation range occur and wait for the pullback to either support or resistance which Is actually the high or the low of the consolidation range. Once this takes place I look for specific candle patterns on the 30 minute chart and use approximately a 20 to 25 pip stop loss.

The candle patterns I prefer to trade are evening star, MorningStar or engulfing candles.
You will notice on the euro/USD chart that after the breakout of consolidation occurred, a morning star pattern never developed and price reversed back down inside of consolidation towards the lows.

Ultimately, your ability to remain sensitive to market changes is what will allow you to make the necessary changes quick enough to prevent giving back future profits. This sensitivity can be practiced even without live trading.

Thanks for reading,
LC