Choppy Market today... Anyone else

[andrewbee]

Quote from ProfitTakgFool:

Fade what everyone else is doing when the price gets to extreme levels.

That works ... except on the days when it doesn't work. Sometimes, you go to fade a move only to get steamrollered. The trick is (IMHO) learning to read the market action to assess the level of choppiness vs. trend strength.

The last 4 days have basically been a random walk. I have an ATS that does great under these conditions (going contrary to the crowd after a fixed amount of price movement). On strong trending or whipsaw days though I get hammered, so I am learning to spot those coming based on the pre-market action, and either adapt or stay out altogether.

 

[piezoe]

Quote from andrewbee:

That works ... except on the days when it doesn't work. Sometimes, you go to fade a move only to get steamrollered. The trick is (IMHO) learning to read the market action to assess the level of choppiness vs. trend strength.

The last 4 days have basically been a random walk. I have an ATS that does great under these conditions (going contrary to the crowd after a fixed amount of price movement). On strong trending or whipsaw days though I get hammered, so I am learning to spot those coming based on the pre-market action, and either adapt or stay out altogether.

There are two kinds of choppy: non-erratic choppy and erratic choppy. I like like to trade non-erratic chop, but i have a special technique for the erratic stuff i don't care much for. You see the latter when the volume is low. This pm in ER2 was example of erratic chop on low volume (less than 5 K contracts). This makes trading very tricky, because even though the market eventually moves to where you expect it to, you get flushed in the meantime with the volatility making your trade a poor risk to reward. What i do under those circumstances is enter at anticipated extremes. And then set a tight stop. Much of the time i won't get my entry, but when i do it's a safe one with relatively low risk.

 

[BSAM]

Quote from piezoe:

There are two kinds of choppy: non-erratic choppy and erratic choppy......

(Rolls eyes.....) Now I've heard it all. Is it possible for me to get a girl only a little bit pregnant, or somewhat pregnant, or erratic pregnant or non-erratic pregnant? Oh man, I'm getting confused here.

 

[Nope]

Quote from piezoe:

There are two kinds of choppy: non-erratic choppy and erratic choppy. I like like to trade non-erratic chop, but i have a special technique for the erratic stuff i don't care much for. You see the latter when the volume is low. This pm in ER2 was example of erratic chop on low volume (less than 5 K contracts). This makes trading very tricky, because even though the market eventually moves to where you expect it to, you get flushed in the meantime with the volatility making your trade a poor risk to reward. What i do under those circumstances is enter at anticipated extremes. And then set a tight stop. Much of the time i won't get my entry, but when i do it's a safe one with relatively low risk.

I know what you mean. I think this is a trait more common to the ER2 than any of the other mini's or even stocks.

 

[samus]

I for one look forward to the "normal" trading days of earlier in the month. I can definitely tell the difference between this market and the one over the last couple of months. I can still pull out a profit, but it's a little more difficult to do.

 

[piezoe]

Quote from samus:

I for one look forward to the "normal" trading days of earlier in the month. I can definitely tell the difference between this market and the one over the last couple of months. I can still pull out a profit, but it's a little more difficult to do.

Yes, exactly. Any experienced trader will recognize the difference in the character of the market, and what you say is exactly right. You can pull a profit out, but it is more difficult and requires great restraint and patience.

 

[piezoe]

Quote from BSAM:

(Rolls eyes.....) Now I've heard it all. Is it possible for me to get a girl only a little bit pregnant, or somewhat pregnant, or erratic pregnant or non-erratic pregnant? Oh man, I'm getting confused here.

I think of a normal sideways market on good volume as a non-erratic choppy market, but i haven't seen many of those lately. They are fairly easy for me to trade -- just lots of fairly predictable reversals. What we have had lately is a market that is going somewhere but following an erratic path to get there. This market is volatile, and the price swings are exaggerated. That tends to increase risk on intraday trades, though it also increases profit potential. The erraticness reaches a maximum at low volume. Please also consider that I may be the one confused, not necessarily you.

 

[piezoe]

Quote from ProfitTakgFool:

Alright guys, I'm posting my fills for the day with a lot of stuff removed. I don't want to give everything away

Where on this chart did I try to "catch a move?" Nowhere. If you stop trading patterns, stop looking for trends, and just trade on hard facts you'll do much better. Most traders try to "catch a move." Doing that converts you from a trader to a forecaster, or a predictor. It means you become a bull or a bear. You "think" or "want" the market to do something. If you wait until the actual move does occur, and ENDS, you are now trading on hard, cold facts. You know the move has occurred. There is no guessing, no hoping, no nothing. You just fade it. Buy what everyone else is selling and sell what everyone else is buying.

There are times you won't have perfect timing. Don't put your entire line on the trade with 1 trigger. You can scale into a trade if the first trigger doesn't work. Take a partial when the market offers it to you.

I nailed every trade today except the last 2. The one circled....I had to leave so I just had to get out, +.25. It hit my target. The last one...I just got back and scalped a quick 3 ticks. The rest of 'em were pretty good.

I ain't the perfect trader -- that guy ain't out there. But if you can remove the guesswork from your job you will be light years ahead of the crowd. No guessing or "catching" anything here and it netted me 17.25.

Fade what everyone else is doing when the price gets to extreme levels. Take profits like a fool and forget the rest. You don't have to catch any kind of a move to make money. Leave that guesswork to the rest of the crowd. Just fade what they do. And yes, the market is dead F'n random. I win based on that assumption every single day.

You're only fooling yourself. When you fade a move you are "... a forecaster, or a predictor." But i do understand what you are saying. That is essentially the way i trade these markets, i fade the extremes whenever the market will let me in at my price. And i insist on my price or i don't do it. But i am, sad to say, predicting, as are we all. Otherwise there is no difference between trading and pulling the handle on a slot machine.

 

[traderpro]

Quote from piezoe:

Yes, exactly. Any experienced trader will recognize the difference in the character of the market, and what you say is exactly right. You can pull a profit out, but it is more difficult and requires great restraint and patience.

You need to learn all market's as the market will change. It is not as easy when the market get's "Chop Chop".To understand the character of the market each day/wave is key to succeed.