2. Consolidation / Range
Well, we know first that it depends on the timeframe, however we can easily discern those 2 modes in which market operates based on Hourlies.
Yes - one can easily look at the Daily chart for a direction - then watching the Hourly helps as a guide to what is the market really going to do. If Daily chart has a signal - one always needs the Hourly to precise the Entry and Exit strategy.
> TREND --- Remember! The market moves in TREND like 10-20 % of the time - and that's whenthe big moves materialize... then you have the other say 80% of the time for Accumulation / Distribution phaze.
> RANGE --- Remember! Once there was a big move the market will need time to digest and the new Accumulation/Distribution cycle begins - Big players unload their inventories on tops where retail accounts buy the Highs - - once there are no more buyers the market retraces 50% and you have another A/D cycle...
So basically range market takes most of the time since players need to make their minds - weak hands must give in and Big Players need to Accumulate/Distribute new inventory...
RANGE / Consolidation phaze can also be attributed as a Search & Destroy campaign for floor specialists, big Investment firms and especially Large Interbank players which have better info on stops and positions in the market and they try to gun the stops and always move in the direction that is most vulnerable...
E.g. if retail accounts are like 80% long the EURUSD - it is easy for Big players to move through the 99% crowd as this the direction of Least Resistance as most already are Long and there is no more cash to Support that campaign.
TREND / RANGE - Distinguishing the market Modus Operandi is not easy but Bollinger Bands which are designed to measure the Volatility can be of great use!
Some remarks from my Great Friend Oil Man:
> Most break happen on Friday as players square positons.
> Range days are mostly Monday and Thursday as Friday positons are in the process of Accumulation/Distribution.
> Wednesday to Friday are when most trends materialise - - also due to the carry interest swap points players long the High yielders against the YEN as Wednesday is a 3-day rollover.