it seems a lot of people are looking to catch a trend. but, as Ditch puts it, if choppiness is more likely to occur, why not look to profit from choppiness?
emini - choppy or trend determination
- Thread starter esu2
- Start date
Do yourself a favor and try to learn to trade with the trend rather than chop. In a range it is extremely difficult to find a situation in which the r/r is favorable. Trading the trend is very difficult also but your stops and targets are much easier to identify. I would leave the chop to the well experienced for now.
p.s. yes it chops the majority of the time but the single best thing you can learn is to sit on your hands and wait for your setups.
p.s. yes it chops the majority of the time but the single best thing you can learn is to sit on your hands and wait for your setups.
I will admit in the past this had been something that eluded me. I would look for moving averages to use for trend indicators, then I realized that so many traders use different moving averages and different timeframes, that a trend must be something obvious to all that see it.
So, the question is what do all traders look at........PRICE.
Determining trend can be such huge help to your trading that it is one aspect worth spending a lot of time to determine, then learn how to use it to your advantage.
A series of higher highs and higher lows is an uptrend, a series of lower highs and lower lows is a downtrend. I really believe it as simple as that. If you look at a chart and cant see a series of either higher highs or lower lows then guess what, THAT IS THE CHOP.
What we as traders must realize is that we dont trade in a box. I came to this conclusion quite sometime ago and it greatly helped me in trading. All this means is just because you may trade off a 1min or 5min you should at least be aware of the trend in other time frames, as well as, the daily of course. This will enable you to see the bigger picture and more easily aid in identifying targets for entry and exit.
Now with all this in mind, what next? Next, you determine what timeframe you are most comfortable trading and provides you with setups you are able to identify and trade as well as feel comfortable with as far as stop loss distance.
Another important aspect to all this is expectation. But that is another ballgame as I am of the belief that each timeframe has different expectations as far what a trader can reasonably expect from the majority of trades within a specific timeframe.
Ok I am going on too long for a simple reply to a basic question. Let me end with one more thought. While trend is important something that has equal value is ability to determine maturity of a trend and when to stop riding it and look to play a possible reversal or stand aside while chop occurs, as it does in all timeframes.
Summary of my thoughts:
1. Important to identify trend.
2. Trend should be something universal ( some may disagree )
3. Learn the how to best use the trend within the timeframe you trade while being able to identify and utilize it in wider timeframes.
4. Understand maturity of trend. (old trend = weak moves)
Some may disagree and please remember I am confident in my theories as they have served me well. Just sharing what I know and how I use it. I also love to play trend reversals when a trend appears tired but this is not a thread discussing that.
" Trend is your friend, ( except when it is not ) "
AllenZ
So, the question is what do all traders look at........PRICE.
Determining trend can be such huge help to your trading that it is one aspect worth spending a lot of time to determine, then learn how to use it to your advantage.
A series of higher highs and higher lows is an uptrend, a series of lower highs and lower lows is a downtrend. I really believe it as simple as that. If you look at a chart and cant see a series of either higher highs or lower lows then guess what, THAT IS THE CHOP.
What we as traders must realize is that we dont trade in a box. I came to this conclusion quite sometime ago and it greatly helped me in trading. All this means is just because you may trade off a 1min or 5min you should at least be aware of the trend in other time frames, as well as, the daily of course. This will enable you to see the bigger picture and more easily aid in identifying targets for entry and exit.
Now with all this in mind, what next? Next, you determine what timeframe you are most comfortable trading and provides you with setups you are able to identify and trade as well as feel comfortable with as far as stop loss distance.
Another important aspect to all this is expectation. But that is another ballgame as I am of the belief that each timeframe has different expectations as far what a trader can reasonably expect from the majority of trades within a specific timeframe.
Ok I am going on too long for a simple reply to a basic question. Let me end with one more thought. While trend is important something that has equal value is ability to determine maturity of a trend and when to stop riding it and look to play a possible reversal or stand aside while chop occurs, as it does in all timeframes.
Summary of my thoughts:
1. Important to identify trend.
2. Trend should be something universal ( some may disagree )
3. Learn the how to best use the trend within the timeframe you trade while being able to identify and utilize it in wider timeframes.
4. Understand maturity of trend. (old trend = weak moves)
Some may disagree and please remember I am confident in my theories as they have served me well. Just sharing what I know and how I use it. I also love to play trend reversals when a trend appears tired but this is not a thread discussing that.
" Trend is your friend, ( except when it is not ) "
AllenZ
Allenz..
This thread IS discussing trend reversals.
I may have not been clear in the intro..
but I want to know when we are in a
CHOP mkt so I can use my "CHOP mkt indicators"
such as bollinger band extremes.
"If you look at a chart and cant see a series of either higher highs or lower lows then guess what, THAT IS THE CHOP."
Yes, when you see no hh or ll.. you are ALREADY in the chop.
Is there a signal that will say: the mkt is going to chop
for the next 3 hrs... or be choppy today..
esu2
This thread IS discussing trend reversals.
I may have not been clear in the intro..
but I want to know when we are in a
CHOP mkt so I can use my "CHOP mkt indicators"
such as bollinger band extremes.
"If you look at a chart and cant see a series of either higher highs or lower lows then guess what, THAT IS THE CHOP."
Yes, when you see no hh or ll.. you are ALREADY in the chop.
Is there a signal that will say: the mkt is going to chop
for the next 3 hrs... or be choppy today..
esu2
Let's face it...if you could determine when a market was going to chop around for a few hours, then it's obvious that the REST of the time it would be trending. So if you could determine chop, wouldn't it be more profitable to trade the trend anyway? That is, after the chop period ended?
Somehow I think that answer won't satisfy you, eventhough it seems quite practical to me. Therefore I would start with the premise that most chop occurs in the middle part of the trading session. I'd leave out the beginning part of the day and the end. These are the least likely to chop in my view.
Taking advantage of chop though implies that you will need to FADE the move, knowing that it's going nowhere. Doing this with a one point stop seems unlikely to me, but hey, prove me wrong.
If I were going to try to trade chop, I would determine the trend, and then trade moves that move against that trend. Let's say determine the trend on an intraday chart...and then buy setbacks against whatever that trend is.
I'd use a bigger stop, and go for a bigger profit if I were you.
OldTrader
Somehow I think that answer won't satisfy you, eventhough it seems quite practical to me. Therefore I would start with the premise that most chop occurs in the middle part of the trading session. I'd leave out the beginning part of the day and the end. These are the least likely to chop in my view.
Taking advantage of chop though implies that you will need to FADE the move, knowing that it's going nowhere. Doing this with a one point stop seems unlikely to me, but hey, prove me wrong.
If I were going to try to trade chop, I would determine the trend, and then trade moves that move against that trend. Let's say determine the trend on an intraday chart...and then buy setbacks against whatever that trend is.
I'd use a bigger stop, and go for a bigger profit if I were you.
OldTrader
The original question is how to determine when the market is going to trend and when i its going to chop.
The market does not chop 90% of the time... or if it does I would like to read that study myself.
The ADX is supposed to tell you when a trend is developing, and to some degree the strength of the trend. I don't use it, maybe I should.
We all tend to agree that if the market is not trending then it is chopping, or consolidatiing.
I have to agree with the premise that you only know in hindsight whether a market trended or chopped.
The market does not chop 90% of the time... or if it does I would like to read that study myself.
The ADX is supposed to tell you when a trend is developing, and to some degree the strength of the trend. I don't use it, maybe I should.
We all tend to agree that if the market is not trending then it is chopping, or consolidatiing.
I have to agree with the premise that you only know in hindsight whether a market trended or chopped.
lol
