how can i avoid sideways price action

[RedTankEra]

You can improve by trading in a non choppy environment, but there's no guarantee that it won't happen after you enter the trade.

The honest answer, contrary to what gurus might suggest, is that you cannot.

You can reduce it but can never escape it altogether.

 

[xelite777]

I have multiple test results that suggest otherwise. Not at the computer at the moment but when I am will be happy to share.

Yes, it should be interesting to study the behavior and performance of breakouts with low volume , compared to breakouts with high volume. For example, how far do they "travel" after the breakout, in each case?

Thanks for your feedback

 

[xelite777]

You can improve by trading in a non choppy environment.

The problem with this idea is that some of the most powerful breakouts occur precisely when the market is choppy and seemingly going nowhere...

 

[LlewelynJames]

You can improve by trading in a non choppy environment, but there's no guarantee that it won't happen after you enter the trade.

The honest answer, contrary to what gurus might suggest, is that you cannot.

You can reduce it but can never escape it altogether.

Absolutely agree. That's why I suggest that one should only trade a standard breakout model if it's on a large universe of uncorrelated assets. Vola based stops, small size.

 

[xelite777]

Only trade breakouts when the 60 day historical volatility of the stock that you are trading is less than 40.

Good point.

In other words you are looking for "quiet", "boring" stocks ready to explode.

 

[LlewelynJames]

Good point.

In other words you are looking for "quiet", "boring" stocks ready to explode.

Perhaps. All I am saying is that tests have shown the HV filter to improve certain breakout strategies. I believe that Connors and Alvarez published test results that found the same.

I'll leave the 'why' the filter works to the ET members who are smarter than I am.

 

[xelite777]

Perhaps. All I am saying is that tests have shown the HV filter to improve certain breakout strategies. I believe that Connors and Alvarez published test results that found the same.

You are probably talking about their "S&P Low Volatility Breakout Trading Strategy".
Impressive results I must say.

Here are the hypothetical results, according to their website.

 

[buwa84]

Only trade breakouts when the 60 day historical volatility of the stock that you are trading is less than 40.

All my tests show that these rules significantly improve the performance of a standard breakout model.

Thanks all of your feedback and advice.

LlewelynJames,

Can you please elaborate on " 60 day historical volatility of the stock that you are trading is less than 40. È..

Since reading all the post i have been using the SMA usually 20 and a 50 as a filter. Look at stocks which above both SMAs and its been showing me better setup.

Really appreciate all the feedback and advice.


Thanks

 

[buwa84]

Also i prefer to trade only day charts for now as i got a full time job. So basically i do my research at night. If i have free time the next day i will trade at work. If the next day seem to be a busy a one i put stop limit orders with stop loss and tight profits targets as i dont get to watch the trade play.

 

[bashatrader]

You can't avoid sideways action and if you try you may and probably will make costly mistakes. Just wait for a trend to start and either ride the market or get stopped. I think you are impatient and this is not how to start learning how to trade. This is a very speculative stock you have chose and market makers are not going to make you happy at their expense. This is not a good stock for day trading imo. It may get stuck at same level for weeks pending news. Trying to make money day trading low prices stocks is like trying to fly a helicopter before you even tried a bicycle. Maybe you should try more liquid, high cap stocks.