Sometimes a stock tends to trade in a range for extended periods of time. This can happen in any timeframe... intraday, daily, weekly and so on.
Whatever trading system you are using, there will be a whipsaw in a particular timeframe. This will not be apparent immediately but 2 consecutive loss making trades should alert you to the event.
See this chart of ULTRACEMCO where the first two whipsaws (highlighted region) point to a rangebound market. At this point, you should ignore all signals till the stock breaks out from the range.
Note that while the stock is rangebound in one timeframe, you can make good money by trading in the next lower degree timeframe.
Whatever trading system you are using, there will be a whipsaw in a particular timeframe. This will not be apparent immediately but 2 consecutive loss making trades should alert you to the event.
See this chart of ULTRACEMCO where the first two whipsaws (highlighted region) point to a rangebound market. At this point, you should ignore all signals till the stock breaks out from the range.
Note that while the stock is rangebound in one timeframe, you can make good money by trading in the next lower degree timeframe.
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