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Hey guys I currently trade ES using volume profile but I have Been working on trading CL sim. Main reason is I can get a much better risk reward with the momentum. It's been profitable even when caught in chop cuz of the risk reward. I'm worried about the mental aspect when going live it would b nice to b able to spot chop early and not get caught in it. Wondering if anyone can share an indicator or some tricks to spot chop. Thx in advance
Can you help answer these questions from other members on NexusFi?
Legendary / Stochastic Calculus is not your friend
Experience: None
Platform: Ninjatrader, Python API
Broker: CQG
Trading: S&P, Crude, Gold
Posts: 860 since Oct 2009
Thanks Given: 3,461
Thanks Received: 1,546
I like ADX, in ninjatrader I use the DM indicator. Another way is to throw a fib retracement on the last swing. One important aspect of CL and chop is time of day. I haven't run any studies but it sure seems to me that when the locals are at lunch pace can really slow down. Also there are other quiet times that I believe you will see as a pattern.
That post hits the nail on the head with a couple losers and then u know u r out of chop when u miss the breakout LOL.i guess money management is still best combat for chop.
Watch a 30m chart starting at the pit open. If the bars start to overlap, for example one bar takes out the high of the previous, but then another bar takes out the LOD, then back into range... Those days you want to fade the moves and aim for tighter targets. But, if each 30m bar has a higher high and/or higher low, you only want to go long and anticipate it to continue. Lower low and/or lower high pattern, only go short. Keep in mind the higher trend, gaps opens, news events like EIA, all of that has an impact on directional probability, so indicators to determine short-term chop can be misleading.
Compare the cumulative volume and range at any point in the day you like to the median values over the past 20 days at the same point in the day. If you see that volume and range are significantly lower (for me, 20% or lower than usual), then you might expect that you will be in day with decreased volatility. Usually in the first 15-30 minutes you will have a good idea based on this, how much energy is in the market. This does not necessarily mean that the market will be directionless (i.e., chop), but it is something you might wish to investigate for yourself to see if it is helpful for you.
I use something very similar - I built an indicator for the volume at a particular time of the day, and for a particular type of open-close relationship (open > close vs close > open) and take the difference between the top quintile and the volume of the current bar.
Usually the market will trend when the volume is greater than the top quintile cutoff over a few bars before 7am.
Exported using NT Version 7.0.0.25
The download file contains two indicators which can be used to explore the average range and volume of any intraday time period over a selected lookback period. The average takes into account the day of the week. …
Each instrument has its specific times, when it can be traded, and also has its times, when trading does not pay off. The question is. how to determine the optimal trading times?
