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Chop Indicators
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Chop Indicators

  #51 (permalink)
Market Wizard
virginia
 
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Gary View Post
Cory/All,

'Hogwash'; only kidding... but....

Based on your previous post:

1. At what point, real time, do you know you are in chop based on volume?
2. Once you realize this, do you ignore all price action / everything else, and wait to trade?
3. At what point do you know you are no longer in chop and 'safe' to take another signal?
4. What time frame and instrument are you looking at in this screenshot?

Thanks,
Gary

1) when vol goes below certain level, a horiz line is placed at that level for easy reference.
2) you switch mode from trend to range mode
3) when vol goes above the horz line
4) es 5m.

if you are proficiency in excel, load up 5m data for a month or two do a study on a range of bar vs its volume you will arrive of a conclusion more vol = more range
ps. this doesnt hold true for cl its vol is relative hight most of time.


Last edited by cory; November 7th, 2010 at 09:06 PM.
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  #52 (permalink)
CL Assassin
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cory View Post
1) when vol goes below certain level, a horiz line is placed at that level for easy reference.
2) you switch mode from trend to range mode
3) when vol goes above the horz line
4) es 5m.

if you are proficiency in excel, load up 5m data for a month or two do a study on a range of bar vs its volume you will arrive of a conclusion more vol = more range
ps. this doesnt hold true for cl its vol is relative hight most of time.

Cory,

Thank you for your reply; I have yet to find any good use for volume when trading CL. I think some can find uses for it, after the fact, but, nothing consistent.

Enjoy the rest of your weekend,
Gary

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  #53 (permalink)
Elite Member
vienna, virginia, usa
 
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Chop Indicators



Blz17 View Post
I know this topic has been touched on within various threads but I thought I'd give it it's own spot. Was just curious what people use to identify range bound chop markets?

I've grown accustomed to using TICK, delta and s/r levels on the ES but am real curious what indicators out there people have had success with that could be applied to instruments such as the 6E.

Blz


To identify a range bound market, one of the best indicators I've found is the Average Directional Index. For intraday time frames use a 14-18 period. Overlay with the Directional Movement Index (DMI) as well using the same period. When the ADX is below both the DMI positive and DMI negative, you are definately in a flat market or range bound territory. Another criteria is an ADX reading below 15. This signifies a weak trend reading. For Daily charts a 10-14 period ADX should suffice. The best teacher on ADX is Chuck LeBeau who is now retired. Google him and find anything you can on what he's written on the subject.

Tip: It is critical that in a range bound market, you do not use trend following indicators---you will lose a lot of money being chopped around. You MUST move to an oscillator based indicators, stochastics, %R, etc... and navigate the trade using these indicators and you will do much better. Also, limit your upside profit target, range bound markets also have range bound profit targets-- 1-1.5 ATRs at most.

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  #54 (permalink)
Market Wizard
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veigaman View Post
..
Tip: It is critical that in a range bound market, you do not use trend following indicators---you will lose a lot of money being chopped around. You MUST move to an oscillator based indicators, stochastics, %R, etc... and navigate the trade using these indicators and you will do much better. Also, limit your upside profit target, range bound markets also have range bound profit targets-- 1-1.5 ATRs at most.

if you know when it trends when it ranges then you are set for life.

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  #55 (permalink)
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Chop using Cumalative Delta and Price Action

Take a look at attached pictures. You can often see when price is spiking, trying to rise or even attemting to go lower but the cumalative delta for the day is not following suit. They are either accumalating to mark up prices or distributing to accumalate at lower prices (significant in an uptrend market) to push price higher, usually identified by sideways activity. The cumalative delta can help to see if price is moving with them attemting to move price lower or higher. Chop is around is delta between +/- 10K or even +/- 5K


Trafford

Attached Thumbnails
Chop Indicators-es1.png   Chop Indicators-es2.png  
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  #56 (permalink)
Elite Member
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Trying to find the Damiani Vol meter indicator that someone had on this thread. THe links are dead. Has it been removed? I cant seem to find it. Need to try some indicators to remove chop...its killing my system

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  #57 (permalink)
Market Wizard
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smegey View Post
Trying to find the Damiani Vol meter indicator that someone had on this thread. THe links are dead. Has it been removed? I cant seem to find it. Need to try some indicators to remove chop...its killing my system


The link to the indicator is in post #34 of this thread.

Goes to the NT forum where there are several of the mods of this indicator.

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  #58 (permalink)
Trading Apprentice
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delta


Trafford View Post
Take a look at attached pictures. You can often see when price is spiking, trying to rise or even attempting to go lower but the cumulative delta for the day is not following suit. They are either accumulating to mark up prices or distributing to accumalate at lower prices (significant in an uptrend market) to push price higher, usually identified by sideways activity. The cumulative delta can help to see if price is moving with them attempting to move price lower or higher. Chop is around is delta between +/- 10K or even +/- 5K


Trafford


beautiful illustrations.

in my short trading experience i had too detected this phenomenon by myself.

people can be taught and instructed to hunt for breakouts / breakdowns and then the patterns rarely hold and you end up losing money if you follow the instructions strictly.

let's say a stock is ever closer to breaking below a significant support. it is ever closer to breaching, let's say 60, it is displaying consolidation, edging closer and finally it breaks below. novices and beginners would pounce selling short of the stock before or right at the start of the potential breakdown but a lot of times they end up scalped. price will only fall some cents below the resistance and with a mass of novices riding short it will oftentimes reverse and go back 20 cents or so above 60. this puts massive pressure on those who shorted the stock in anticipation and as they are also taught, a lot of novices will cut their losses but take a loss indeed. 30 or 40 minutes later, the stock will be back below 60 and significantly so.

the solution to this i saw in a youtube video, and it asked to always hold until the 2nd breach. 2nd breach of a support or resistance, 2nd time breaches moving averages in the opposite direction, 2nd regression of price to the moving averages during a trend, etc.

this cumulative delta indicator seems to highlight the same dangers and should be very beneficial. will further research on the concept and check the indicator out if it a version is available for tradestation.

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  #59 (permalink)
Harr
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Eco2New2 overlaid on candles


sharky View Post
so panel 2 has two indicators the eco2 and the macd and panel 3 is the 22 ema 22 zerolag...sharky

On the July 9, 2009 there was a thumbnail posted the Eco2New graph which has the indicators on the imput series in other words right on the candles. I was looking for that actual indicator to download, I have the EcoNew2 White Fading Only but that has the indicators all on the bottom of the chart and I have the Eco2New Sharky Pack which is also on the bottom of chart.
Thanx,
Harr

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