Market types

How do you know when a trend has started? Ended? This forum is for discussions about trend indicators and signals.
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Market types

Post by ladadriver » Wed Apr 11, 2007 10:11 am

A thought from the inexperienced...
From c.f.' book, four market types are suggested:

- Stable, Quiet
- Stable, Volatile
- Trending, Quiet
- Trending, Volatile

Is there enough weight in Mean Reversion to add it as a third dimension?
Or, would you consider the property a subset of volatility and/or trendiness?

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Post by RedRock » Sat May 26, 2007 2:24 am

I would think it a subset or twin , of stable and volatile. With mean reversion the more trend-less and wild, the more opportunity within that theory.

But, it would come down to defining trend mechanically as well. Selling a spike in a downtrend should be at least as valid as selling a spike in trend-less conditions. market mode predicting or perhaps following.., could be a useful tool if it were robust.

Look at a 5 min sp chart. there are days when you could sell the spike and buy the dip for hours at a time. Its those pesky trends in-between. :|

So, I would think that mean reversion is a method within the four defined states.

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