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An indicator to avoid the chop and slop????


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An indicator to avoid the chop and slop????

  #1 (permalink)
sacramento, ca.
 
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An indicator to avoid the chop and slop????

Hello group, I am jeremy. I have a question for any and all of you...Does anyone have a good indicator that they use to filter out the chop and slop in the markets? I have been searching for quite some time and have yet to find something that works good for the purpose. Thankyou for you time and any suggestions you may have! Best of trading to you all!!! Jeremy

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  #3 (permalink)
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jpstyles2002 View Post
Hello group, I am jeremy. I have a question for any and all of you...Does anyone have a good indicator that they use to filter out the chop and slop in the markets? I have been searching for quite some time and have yet to find something that works good for the purpose. Thankyou for you time and any suggestions you may have! Best of trading to you all!!! Jeremy

"Chop" is usually created by users who are trying to trade a really small timeframe, because they want to reduce risk (limit losses). This of course is almost always the wrong approach (imo) and is caused due to inexperience.

There is no "chop". I have not thought about "chop" in years, ever since finally moving to bigger time frames. No, this does not mean increasing risk.

Watch this webinar:
https://futures.io/webinars/jan14_2012/where_to_start_part_1/

Read this thread:


Between the two, you should be able to solve your chop problem -- even if you disagree with everything I've said and still trade really small charts.

Do yourself a favor and avoid going down the road of "filters" with indicators to try and "keep you out of chop". It's a suckers game. There is no chop, it's something you create by looking at the market in the wrong way.

Mike

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  #4 (permalink)
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jpstyles2002 View Post
Hello group, I am jeremy. I have a question for any and all of you...Does anyone have a good indicator that they use to filter out the chop and slop in the markets? I have been searching for quite some time and have yet to find something that works good for the purpose. Thankyou for you time and any suggestions you may have! Best of trading to you all!!! Jeremy

As I already mentioned in another thread, this is still my all-time favourite post regarding chop / chop indicators:

https://futures.io/ninjatrader/21273-avoid-chop-indicator.html#post234869

"If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much." - Jim Rohn
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  #5 (permalink)
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I would also suggest looking at the market through the eyes of Volume or Market Profile. It will give you new insight.





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  #6 (permalink)
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This post by monpere is not bad to identify chop:

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  #7 (permalink)
sacramento, ca.
 
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Thankyou for the replies....

I agree with the replies, and appreciate them and the info and advice. I have been trading for 4 years and have been working on an auto trader system that I have been working on and perfecting for about a year. Just wanted to get some insight and other thoughts than just my own. The site is great Mike, there is an enormous amount of information, and great advice here, as well as many helpfull people! Again, I appreciate the info, advice and the links to other conversations of the same topic....

Jeremy

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  #8 (permalink)
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jpstyles2002 View Post
Hello group, I am jeremy. I have a question for any and all of you...Does anyone have a good indicator that they use to filter out the chop and slop in the markets? I have been searching for quite some time and have yet to find something that works good for the purpose. Thankyou for you time and any suggestions you may have! Best of trading to you all!!! Jeremy

You, you are the indicator to avoid "chop". But I do not think their is a thing called chop. If you pay attention to support and resistance then you will always be lead in the right direction. Higher highs and lower high's and lower low's and lower high's. Don't spend time trying to find an indicator to do for you, what you can do on your own. One does not exist. Good luck

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  #9 (permalink)
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jpstyles2002 View Post
Hello group, I am jeremy. I have a question for any and all of you...Does anyone have a good indicator that they use to filter out the chop and slop in the markets? I have been searching for quite some time and have yet to find something that works good for the purpose. Thankyou for you time and any suggestions you may have! Best of trading to you all!!! Jeremy

yes, choppy markets do indeed exist. they even have many different names. I like to call it the no trading zone. and you'll find chop on any timeframe, big or small.

and even here, my very favorite indicator can be of assistance. it's called the vwap. one big advantage is, the vwap has about the same value on a 2 range or 60 min chart. also you don't need to guess what period to use. normally I try to avoid any trades between the upper and lower 1st standard deviation bands (for me that's also the value area). however, there's one exception. in strong trending markets if price pulls back to the vwap line, that might be a good opportunity for reentering the market.


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  #10 (permalink)
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IMO - there really is no 'chop'.

In market auction theory - what many see as 'chop' is called 'price acceptance' or 'rotation around value'.

Markets will make a move, consolidate (chop/accept/rotate) and then make another move.

This is just how price moves. Lot's of traders are making money out of these 'chop' areas as they represent areas where the trading is fairly predictable.

Of course, if the only tool in your box is "trend trading", then you are going to have a lot of trouble in these areas.

There's 2 ways I approach these areas:

1 - fade the extremes
2 - on consolidation after a move up - buy the bottom of the 'chop' and scale half off @ the top - chances are it will carry on in the original direction and by scaling @ the top you de-risk the trade.

In terms of spotting these areas, they usually originate with exceptional volume on the volume profile. On a move up, a high volume node should support the market on a retrace, if it passes back through high volume, then you need to start considering that a short term consolidation area is being born.

So - learn recognise them - sure. Avoid them - well - it's good idea to study the percentage of time markets consolidate vs trend and then work from there.

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