Did you know the Ranging Market Detector by Innovicient Ltd has numerous uses that help our clients? There are many ways in which you can use the Ranging Market Detector; this indicator is versatile and flexible. However, for the purpose of this post, and today, I will cover four key uses. They are all straight forward.
1.Identify New Trends Early
For you to enable the feature to facilitate opening of trades early during emergence of new trends, here are the steps to follow.
Step 1: Disable the Histograms by selecting “true” in “Disable Histograms” in the settings.
“Disable Histograms=true”. See fig.1
Fig.1. Ranging Market Detector Settings. Disabling Histograms.
Step 2: Consequently, the histograms disappear and two levels are drawn, -20 and 10 plus the short-term and long-term signal lines.
A. Early Shorts Entries
After step 1 operation and you see the long-term signal line is below -20, you have two options to sell. In our tests, this strategy has generated well over 80% accuracy. Check https://www.youtube.com/watch?v=fXG482GZs-g
Option 1: Go SHORT
As the long-term line is below -20, short when the short-term/fast signal line (DodgeBlue) surges past level 10 and then drops below 10. See fig.2 below.
Option 2: Go SHORT
As the long-term line is below -20, short when the short-term/fast signal line (DodgeBlue) surges past level -20 and then drops below -20. See fig.2 below.
Fig. 2. Using Ranging Market Detector as a trade signal generator. Sells
B. Early Long Entry
Similarly, after step 1, buy opportunities show clearly. If you see the long-term signal line is above-20, two alternatives of buying present. See fig. 3.
Option 1: Go LONG
When the long-term line is above -20, buy when the short-term/fast signal line (DodgeBlue) drops below 10 and then surges past level 10.
Option 2: Go LONG
When the long-term line is above -20, buy when the fast signal line (DodgeBlue) drops below -20 and then surges past level -20.
Fig. 3. Using Innovicient’s LTD Ranging Market Detector as a trade signal generator. Buys
2. Identify a Choppy/Sideways Market and a Trend
Step 1: For this function of the Ranging Market Detector to be activated, you have to enable the display of Histograms in the “Disable Histograms” in the settings section. You do this by selecting “false” i.e. it should be as follows. Disable Histograms=false. However, by default, the value is set to “false.”See fig.4
Fig. 4. Ranging Market Detector Settings. Enabling Histograms.
Step 2: Check whether there are histograms drawn or not. The market is Ranging, Retracing, or Changing direction if histograms are displayed. However, in this section, I will cover the indication of choppy/whipsawing and trending markets.
2a. Identify a Choppy/Sideways Market
When you see these histograms, the market has no momentum and is also lacking direction. Therefore, we advise that you stay out or take partial profit. Visibly, either or both of the signal lines are within levels -30 and 30. See fig.5 below. The right time to open a trade is after the histograms stop drawing.
Fig. 5. Indication of a Ranging/choppy Market: Ranging Market Detector.
2b. Identify a Trending Market
The market always enters a trend after the ranging is over. Hence, you should activate the email and push notifications to alert you when the ranging market is ending. Whenever you see that no more histograms are being formed, the sideways market is officially over and the breakout has occurred. See fig.6.
· Most importantly, make sure that if you are looking for a buy, both signal lines are above 30 AND
· If you want to short, the two signal lines must be below -30.
Bonus: Besides, the Ranging Market Detector ALLOWS you to stay in a trend MUCH LONGER than any indicator out there. For example, in SP500-H1 Chart, the indicator continually stayed in buy mode for well over a month and all through giving buy re-entry opportunities. Therefore, even though it is an oscillator, it is able to inform you when there is a trend and also alert you when the asset is retreating from a TRUE oversold/overbought state. See fig. 7
Fig. 6. Indication of a Trending Market: Ranging Market Detector Showing Breakout.
Fig. 7. Holding on a Trend for Over 30 days in 1H Chart-SP500. Ranging Market Detector.
3. Inform You of Early Change in Market Direction.
The Ranging Market Detector can show you the change of market direction.
A. To signify a transition from bears to bulls both the long-term and short-term signal lines close above -30 having pierced from below AND
B. To indicate the bears are planning a takeover, the long-term and the short-term signal lines drop below 30 from above.
· As seen in fig. 8, the price dropped to point no. 1 on the price chart and point no. 2 on the Ranging Market Detector.
· The Histograms form as the price continues to surge until the histograms stop forming and the short-term/fast signal line moves beyond level 30.
· If you want to go LONG in this scenario, wait for the short-term signal line to retreat below 30 and then back above 30 while the long-term signal line is above 0 and no more histograms are forming.
· If you want to SHORT in this scenario, wait for the short-term signal line to retreat above -30 and then back below -30 while the long-term signal line is below 0 and no more histograms are forming.
Fig.8. Detect When the Market is Changing Direction. Ranging Market Detector.
This part is simple. A retracement MUST be within a trend. For example, as indicated in Part B. “Identify a Trending Market,” The long-term signal line has to be above 30 for a BUY trend to be valid AND Below -30 for a SELL trend to be activated.
A. Buy-Biased Retracement and Re-Entry Rules
1. First, the LONG-TERM signal line must be ABOVE 30.
2. Secondly, the SHORT-TERM signal line moves below 30
3. Thirdly, Histogram(s) form, LightGreen or Blue upper part. If LightGreen histograms form, buys will be stronger.
4. Lastly, Re-Enter BUY when the SHORT-TERM signal line pierces above 30 again.
5. If you are already in a trade, it would be a good time to move your SL below the recent low.
B. Buy-Biased Retracement and Re-Entry Rules
1. First, the LONG-TERM signal line must be BELOW -30.
2. Secondly, the SHORT-TERM signal line moves above -30
3. Thirdly, Histogram(s) form, Red or Yellow lower part. If red histograms form, sells will be stronger.
4. Lastly, Re-Enter SELL when the SHORT-TERM signal line crosses below -30 again.
5. If you are already in a trade, it would be a good time to move your SL above the recent high.
This is your part. Is there any other way you see the Ranging Market Detector to be useful? Share with us. Every eye has its own depth of details. Help us better for the future.