As a new trader, I have a question how to develop personal trading method. As the market can be categorized as trend or swing market, shall we try to find a or several indicators to work well all the time? if not and we need to trade differently in both markets, then how to let the system know it's the time to switch? Hope you can share your thoughts:clapping:
It is an excellent question.
Positional trading systems especially trend following systems gives lot of whipsaws during a trading market or range bound or consolidation phase.
A way I could think is to distinguish a trending and trading market is trend strength.
(A wild guess - A combination of ADX,OBV true range,Momentum,Volume)
A trend strength indicator could be a possible solution for this problem.
Seniors please advice.
Also please let us know why stocks consolidate ?
What happens during the consolidation phase ?
How to determine if it is an accumulation or distribution phase ?
Thanks in advance.
-JK