Mastering Sideways Markets With Auction Bars and Range Projections

The “Trading in Sideways Markets” webinar featured LizardTrader co-founder and CEO Kris Lassen. Kris focused on determining whether the markets are trending or ranging, and he introduced innovative tools to improve trading in such conditions. Here’s a recap of his insights.

Understanding Market Behavior: Trends vs. Ranges

Markets, much like accordions, alternate between periods of movement (expansion) and rest (contraction). Recognizing this cycle is crucial for traders aiming to navigate both trending and ranging scenarios effectively.

Kris explained that market expansions often occur after periods of contraction, spurred by institutional activity. Conversely, range-bound markets typically follow periods of expansion, as traders take profits and rebalance their portfolios.

Tools of the Trade: Auction Bars and Range Projections Suite

Kris introduced two flagship indicators that address the complexities of sideways markets:

1. Auction Bars indicator 

Designed for spotting reversal setups, the Auction Bars indicator focuses on two key patterns:

Spike patterns: Indicating price rejection within a single bar, these patterns show a rapid move in one direction, followed by a return to the opening price. For example:

• A bullish spike features a long lower shadow and small body.
• A bearish spike has a long upper shadow and small body.

Key reversals: These involve comparing the current bar’s high, low, and close to the previous bar, highlighting critical turning points.

Auction Bars are most effective when aligned with higher time frame ranges, such as one-hour or four-hour institutional time frames. These ranges act as critical levels where reversal patterns often occur.

2. Range Projections Suite

The Range Projections Suite helps assess whether a market is expanding or contracting by analyzing average daily ranges. It identifies:

• Noise bands: Representing support and resistance levels during periods dominated by retail traders
• Range expansion bands: Indicating exhaustion levels where prices are likely to reverse

By monitoring these levels, traders can determine if a market is range-bound or preparing for a breakout.

Combining Indicators for Success

For more informed results, it’s important that traders learn how to integrate these indicators.

• Align reversals with higher time frame ranges: Auction Bars identify potential reversals, while the Range Projections Suite provides context for market conditions.
• Focus on confluence: For higher probability trades, look for reversal patterns at noise bands and auction range highs or lows.
• Adapt to market cycles: Use the Range Projections Suite to identify expansion and contraction phases, ensuring that trades align with broader market activity.

For instance, a bearish spike above a noise band and auction range high might signal a short trade opportunity, with targets set at the auction range midline or lower range.

Enhancing the Trading Experience

Kris highlighted additional features of the Range Projections Suite:

• Session-specific levels: Traders can analyze expected noise levels for Asian, European, and U.S. sessions separately, providing greater precision for instruments like oil and gold.
• Dynamic updates: Reversal patterns are confirmed or expire within a defined time frame, ensuring only reliable setups remain visible on the chart.

Try your hand at sideways markets today

Navigating sideways markets is no easy feat—but with the right tools and strategies, traders can turn challenges into opportunities. By leveraging Auction Bars and the Range Projections Suite, you can better understand market behavior, identify key levels, and execute your trades with confidence.

Watch the full webinar here:

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