The perfect indicator exists and it is price. Differentiating between chop & trend isn't magic either. One must choose a timeframe to trade and a single oscillator to confirm what he is seeing in price. He can get the oscillator from Jurik or find it on his own. And know that the trend determined in that timeframe is only good on that timeframe. Once a trader understands and trusts that, he has created his own personal trading environment. Then he only has to apply that environment to any Market he chooses.
Chop vs. Trend
- Thread starter Yag
- Start date
The perfect indicator exists and it is price. Differentiating between chop & trend isn't magic either. One must choose a timeframe to trade and a single oscillator to confirm what he is seeing in price. He can get the oscillator from Jurik or find it on his own. And know that the trend determined in that timeframe is only good on that timeframe. Once a trader understands and trusts that, he has created his own personal trading environment. Then he only has to apply that environment to any Market he chooses.
That's easier said than done. How do you determine wether a price bar is printing in a chop/trend realtime? A lot of people like the DMI, but I don't find it of much use in this market environment.
It's easy to look back after a few bars have printed and analyze in hindsight. Personally I use the prior days movement. If there are 2 consecutive choppy days I switch to a trend system the next day, similarly if the market trends the prior 2 days I switch to a range system the next day. Now it's up to you how you define choppy/trend days. So far that's the only solution that seems to be working for me. If anyone else has a better solution, please share. Thanks.
Wow, what a load of bullsh**
Everyone here has talked all around the subjectâ¦trying to introduce this or that idea.
The original poster was just looking for a trend indicator and everyone has to start pontificating the meaning of life.
Do any of you make money? Seriously.
-T
PS. The poster of Post #2 on this thread, Kut2k2, is wrong. EF says nothing about the direction of a trend; only whether or not one exists. Where do you all get this bs that you just ramble on with? Only absolute values are used in the calculation, think about it for a second.
If your new to trading, do your self a favor. Go find a better forum. Elite my ass.
Sorry. I don't know why I lash out like this. But, seriously, you all are talking out of your asses.
Scaleout.Scalper
Guest
Determining chop vs trend is not as hard as some make it out to be, the challenge is in isolating the range in contrast to bigger market views.
Throw 2-3 of moving averages (say 13, 21, and 34) into various timeframes (start high and work your way down, 60min, 30min, 15min, 5min), when 2 or more of these moving averages dissect the middle of price action, and price not responding well to averages, you have chop, range or whatever word you have for this market condition, but only in that timeframe. A timeframe condition perfect for fading, or reversion to the mean, pick your preference.
Now, back to the challenge, when you do your research you will notice some timeframes might be ranging and others are actually trending, it's up to you to determine who could be the culprit in determining when this range is about to end (out of the scope of this simple post) and in there lies the difficulty, but determining chop is as easy as throwing a group of averages and noticing there is no trend in place, in THAT timeframe.
Throw 2-3 of moving averages (say 13, 21, and 34) into various timeframes (start high and work your way down, 60min, 30min, 15min, 5min), when 2 or more of these moving averages dissect the middle of price action, and price not responding well to averages, you have chop, range or whatever word you have for this market condition, but only in that timeframe. A timeframe condition perfect for fading, or reversion to the mean, pick your preference.
Now, back to the challenge, when you do your research you will notice some timeframes might be ranging and others are actually trending, it's up to you to determine who could be the culprit in determining when this range is about to end (out of the scope of this simple post) and in there lies the difficulty, but determining chop is as easy as throwing a group of averages and noticing there is no trend in place, in THAT timeframe.
Mr. Ya7-200-50;
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Mainly study great trends, Up trends, downtrends, all data on those;
study those much more than chop-slop sideways trends[aka range].
Even chop slop-sideways trends are not so bad if you are in with a good trend profit.
The trouble with so many traders, even investors, they are so highly leveraged;
they cant afford much of a stop or pull back, so they have to stop out even a good trend., or average trend.To whine markets dont trend much is missing the point.
Amen on your moving averages;
200dma, 50 day moving average, [IBD is right again] + 50 period moving average. are helpful. Moving averagers are a good study area, like an UP trend or DOWN trend.
Wisdom is profitable to direct.
Use Perry Kaufman's efficiency ratio, the perfect trend indicator.
Use the unsigned version.
If it's greater than +1/3, you're in an uptrend. If it's less than -1/3, you're in a downtrend. If it's between +1/3 and -1/3, you're in the chop.
Profitable in 2020?
Hello. Welcome to the world of trading. Your question is how do I conceptually define a trend so that a trading platform could apply trading rules appropriately. This is a question that all new comers grapple with when they start.
I think everybody here knows that conceptually, an uptrend is when price makes a series of higher highs, higher lows and higher closes and vice versa for down trend. However, this is extremely difficult when trying to define it mathematically so that you can translate it to an indicator or a trading system.
The short answer is, no one has been able to mathematically define a trend. If someone has defined it, they would be richer than Bill Gates.
In order to move forward in your trading, you will need to refine your questions so you can get better answers to them. Example : How do I mathematically define price action that enables a higher than average probability that a trend trading system would work? Once you are able to refine your questions, you will better be able to find better quality answers that will enable you to incrementally move you to profitability. Hope this helps.