Market Navigator Actionable Levels:
Market NavigatorAuthor John Carusos Notes:
Trade with the trend are words commonly echoed by professional traders. At what price does one sell in a bearish trending market and at what price does one buy in a bullish trending market? The Market Navigator is intended to provide guide posts to identify those price levels.
How to use our strategy:
The rules based strategy is simple.
If a market is in aBullishtrend a trader should only be looking to participate as abuyerand only at thelowend of the range.
If a market is in aBearishtrend a trader should only be looking to participate as asellerand only at thehighend of the range.
If a market is in aNeutraltrend a trader should be looking to participate as abuyeronly at thelowend of the range OR as aselleronly at thehighend of the range.
Determining how a market is currently trending depends on the time line. I typically track markets on both a monthly and weekly timeframe to identify trend bias. In my experience, studying market price, action, and behavior, Ive observed that markets that trend bullish or bearish on a 3-month timeline tend to hold that posture for an extended period of time.
With this in mind, all markets have the tendency to revert back to the mean, whether bullish or bearish trend. In other words, you get bull market dips that create buying opportunities, and bear market rips that create selling opportunities.
Trading ranges are determined by an ongoing tug of war on price levels between buyers and sellers. The top end of a range is typically where buying pressure has run out of steam and the number of sellers overwhelms the market and pushes it lower. Conversely, the bottom end of a range is typically where selling pressure has run out of steam and the number of buyers overwhelms the market and pushes it higher.
Range trading with the trend enables one to participate in a market with predefined entry target levels while keeping the overall bias in sync with the market trend. My proprietary trading range levels can be viewed as support and resistance levels, however unlike traditional static support and resistance, my levels update on the open and close of the market and may be different each period depending on market volatility. The levels factor in both the medium term and near term price action.
Use these levels to help manage market swings and risk. Remember, the amount of risk that you accept is the only aspect of the market you control.Sign up for a free 2 week demo of ourRJOF PRO Trading Platformand John Caruso will include you on his daily email distribution during the trial period.
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