Set-ups for Chop

[abattia]

I need to expand (or even start?) my "stable" of intraday set-ups for choppy days.

Can anyone suggest any favorites?

Any good books/references to get me started along the right track?

As always, thanks in advance.

 

[abattia]

OK, here’s a potential intraday strategy for a day that’s turned choppy …

1. Once you have grounds to believe price may be chopping in a range, fade the range extremes by either
a. waiting for indications of a retracement from a first re-test (but never from a second, or higher, re-test) of the range’s High or Low, or
b. waiting for indications of a retracement from the establishment of a new High or Low for the range.

2. Set TARGET in front of entry price @ + ATR(14 period, on 5-min chart) + commissions

3. Set STOP behind entry price @ - {2 x ATR(14 period, on 5-min chart) - commissions}

So, you need a win/loss ratio of at least 67% for the strategy to work over time (ignoring slippage).

The key elements for success will be the trader’s skill at judging
1. whether price is indeed chopping in a range,
2. whether price is indeed retracing in 1(a) or 1(b) above.

What do the “pro” scalpers think?

BTW, I trade ETFs and some single company stocks intraday (mainly on an automated basis).

But perhaps the above is agnostic in terms of the instruments it might work for?