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I need help avoiding choppy or sideways markets. I would appreciate if you guys can provide me examples of how you aviod small chops or share indicators for NT8. My trading is based on UniRenko bars. I have tried the ana/ausupertrend and moving averages but didn't work for me. My trading style is scalping and small swing trading. Currently I'm trying out the choppiness index...I like it but I'm not sure whether it needs to be configurated to the instrument or time period?
Link to dynamic SR Color Band for NT8.... https://nexusfi.com/attachments/316573d1629940685
This is what I use set the parameters to a 2 or 3 or 4 depending on the instrument(the example may be set at 6 or 9 or 14 the higher the number the better the look) and how much chop you want to avoid....I wait for the breakout or breakdown before I enter a scalp(most of the time but i see the example i gave you has trading inside the chop zone)...I trade the MNQ either 233 tick or 377 tick but it works on all bars....here is an example with Cumulative Delta(bottom chart).... when the cumulative delta breaks out of the bollinger and price breaks out of the zone is my signal to look for a trade.... I think its a great scalping technique.....
I don't think you actually need any indicator to avoid choppy areas. I used to lose a lot of money in choppy areas but now I developed some mind tricks to help me.
If there is any kind of trend you want somebody to jump in and either buy the highs of the previous candlese or sell the lows of the precious candles.
When the market is in a range or choppy areas you don't find buyers above the highs or sellers below the lows.
Another trick is to look at the clock and wait for the close of the candle, if markets get out of range and develop a bull trend, you want a candle to close green and clearly outside of the range, and then the next candle must also close green and break the previous candle highs.
I know it sounds simple but it's not.... it took me years to really get this. Strong buyers buy the highgs, strong sellers sell the lows.... if there is none of those situation there are no strong buyers/sellers and you don't have a trend.
This is actually either the main problem of all trend-seeking trading, or one of them. I'm afraid there's no indicator for it, although many have tried.
The issue is that all trend type indicators/methods work perfectly when there are trends, and fail when price doesn't accommodate the trader by continuing on in the direction it starts with. But you don't know if it will or if it won't ahead of time.
It does come down to assessing context, and I'm afraid the role of judgment is larger than people generally would like. I certainly don't want to discourage looking for an indicator or a technique that can help. The question to always ask yourself is whether what price is doing is more like a range (short movements quickly reversed) or like a trend. There are indicators that attempt to measure volatility, and they may be of help. Observation of whether there is follow-through may help.
Others find value in things that assess what the market is doing a larger sense, including volume profile/market profile, order flow methods, relationship to VWAP, assessing the trending or ranging character of the market at any one time, or just regular support/resistance, and many others. Sometimes a trader can make use of any of these, but it seems to be more an individual matter of something clicking for them, rather than one thing that works for all. We all see things differently, and apply trading ideas differently too.
So when there's a request for an indicator that will solve this issue, which we do get fairly often, I think it just means that the trader has encountered the problem that everyone faces in trading in one way or another -- will this trade work? Solutions seem to be more an individual matter. I don't know that there is one answer.
It would be great to have one, but it may not be as simple as it seems. Sorry.
Not necessarily the answer you wanted, and you may not find it very useful. It is, after all, only my answer.
So let me add one thing, which is to tightly, tightly control your losses. A trader who has good loss control, and who never indulges in emotional or impulse trading, at least has the most basic things down -- and the only things that are under a trader's complete control -- and at least has a chance of success if they can find even a slight edge.
Good luck. I hope you find your way forward.
Bob.
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Edit: uncertainty is the main fact of trading life. Dealing with uncertainty, such as what to do when the method doesn't work, is why controlling risk and loss are so important. More important often enough than the method you use itself. A hard lesson, unfortunately.
When one door closes, another opens.
-- Cervantes, Don Quixote
You can't avoid chop. Chop and directional movement are like the Yin and the Yang (can be thought of as complementary rather than opposing forces that interact to form a dynamic system) That's not a good question to ask. Maybe a discussion about the clues or precursor of an impending motion on the verge to start would provide more ideas.
Well, that's one of the questions you ask yourself over time when you're primarily only trimmed on trends or purely look out for trends, as the saying goes: The trend is your friend. There are some professional "Future traders" who are only trimmed to "long" or "short trading". This especially in "Hedge funds",
What now, as has already been mentioned here in this thread, there is not a single, very specific "indicator" which seems to solve the problem addressed.
If I am an indicator freak, which by the way I used to be, then I rather point to a mix of indicators that you can work out in the various trading platforms or software products like "Metastock" or "Omnitrader". Am pretty much away from most indicators today, but this is another story.
In these two products (M and O), which are not cheap, you can do your analysis offline and privately build your own criteria for whatever. I used to have M for offline analysis on my system and my colleague had O on his system. It was always interesting to compare.
Well, this makes especially sense if you run strategies that don't need "real time data". You just have to download the data via a "data provider", save it in the software and off you go. This as a small excursion to the actual topic. One forgives me.
But now I come to the point, which I find most important: Why do many not trade such markets? What is the problem?
The following is an absolutely simple chart picture which should illustrate these questions. The comment: But I do not know where the market is going will probably not be a big issue for any professional traders in such markets, as even they will not have a 100% guarantee of their views on the matter. And professional traders who are in the market want to earn money. But how is nevertheless again the question and not how long do I have to wait until there is once again a trend.
One thing is certainly also the time window about which one can discuss and argue. And yes, this I admit. Now this most simple chart is about the daily time frame in the Russell 2000 and as you can see, this market is for months in sideways mode or also called "Choppy" and yet the traders earn their money there.
So an other alternative to your question would be this: Would you rather search and spent any more time for a holy grail indicator which may should give you the security for what you ask for, but not exist, or would it may be of more success to find a strategy how to handle such, in this case of the Russell 2000, highly interesting markets.
Just my 2c from an angel a bit outside from pure future traders. Hope you do not mind.
Hi - How did you add Bollinger to Cum Delta. I tried adding it in the same panel but it appears squished. I also tried editing the input series to Cum. Delta for the Bollinger, but if I do that the bars are always inside the band. Thanks!!
you add the bollinger to the chart,....edit the input to the Cum Delta(you have to specify indicator on the edit and then Order Flow Cum Delta), parms are .2 or .3 and 14(the 2 in the screen shot should be .2 or .3 ).....then make sure you put the result into panel 2....or whatever panel that you have the cum delta....
Chop is the reason every person who lives on your street is not a futures trader. It's also why the gurus of YouTube spend all day recording videos with their 13 screens in the background instead of actually trading. They can't trade profitably so they sell courses of themselves teaching techniques that don't work. But chop is your friend. It's the gate that filters out the less serious participants.
