Traders who fail to realize why market conditions are relevant search in vain for the one robust strategy that trades well across all markets in any time frame over the past five to eight years. They hunt for the ultimate oscillator that gives great overbought or oversold readings, but they find those signals only work in non-volatile conditions. Or they follow the trend and then suffer losses when the market returns to a trading range.

Instead, you need to know how to identify the current market’s condition and anticipate when it will change. The percent contraction (%C) indicator helps determine the market’s condition and can be used to boost trading system performance.