Technical Indicator to stay out of choppy range

J

John9999

days like today just chew me up. I trade emini futures. I have looked at all kind of ways to have a "stay out" alert. Chop index, VIX , VXN, Volume, RSI, etc....

ATR I think makes sense. for the NQ I have back tested a over/under reading of 10. On the really choppy days it appears that I would have not traded or traded much less if I use a reading of 10 as my go/no go rule.

I have looked back at charts now and used this rule and it seems to work.

thoughts please......
 
You need not only an ATR, but a range of ATR levels.

For the ES,
I found that with
1) an ATR with a 6min look-back, and
2) a minimum level of 0.50, I would get trapped less often. But too,
3) if the 1minATR(6) got above ~1.0, I'd start to get more nervous, and would pay more attention to turns (via oscillators).

BEST WISHES! You're asking good questions (IMO).
 
thankx... I feel like there is always more to learn. If I had this rule applied just for the last 2 days I would have avoided a bunch of whipsaw loosing trades. Yesterday actually would have been 0 trades.

I am sure I will refine this over time,,,, but I got to try something to keep my on sidelines when conditions are not favorable
 
If it's so simple to identify sideways market by just using indicators, I'd not have wasted so much of my time and energy on it. Years ago, every time when I tried to hold my position for bigger profits, I got killed because of market trading in ranges. My best recommendation is to focus on reading price chart from multiple time frames and you will figure it out some day...
 
It more of reading charting, higher highs/lows=trend up, but if you want a moving average...
Use 9ema and when 9ema sloping up and bars mostly above it=trend up.
opposite for sells.

If price bars being cut toward the middle by the 9ema=chop
Actually pretty easy and I love chop as it is very controlled market, so I buy very low and sell very high.
 

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Handle123 said:
It more of reading charting, higher highs/lows=trend up, but if you want a moving average...
Use 9ema and when 9ema sloping up and bars mostly above it=trend up.
opposite for sells.

If price bars being cut toward the middle by the 9ema=chop
Actually pretty easy and I love chop as it is very controlled market, so I buy very low and sell very high.
More...
i too have made very fast money in chop-it is psychologically and emotionally the easiest-entering trends is the hardest because you have to buy the high and sell the low.

Al Brooks suggest something very similar but with 20 ema but i have found in this risk management is the key-he called it the ema gap trade.one trader said he used bollinger band and that it was fantastic in chop.

A decrease of volatility when the market makes a new extreme is a sign of impending change of direction. so the next signal that comes of such change should be taken. what is your experience of this?
 
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Handle123 said:
It more of reading charting, higher highs/lows=trend up, but if you want a moving average...
Use 9ema and when 9ema sloping up and bars mostly above it=trend up.
opposite for sells.

If price bars being cut toward the middle by the 9ema=chop
Actually pretty easy and I love chop as it is very controlled market, so I buy very low and sell very high.
More...
had a look at your chart but i could not figure out how you entered....it seemed to entered on pullbacks? am i right?

Al defined a gap bar that one which was touching the moving average this makes sense because in chop you should get very large bars in the chart you have given i will mark the gap bars according to Al which you could have faded for a scalp
i have marked a few including one that failed.
when someone illustrates his ideas with i a chart i know he is a serious trader who is eager to help others and so has a big heart

chop.png
 
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Handle123 said:
It more of reading charting, higher highs/lows=trend up, but if you want a moving average...
Use 9ema and when 9ema sloping up and bars mostly above it=trend up.
opposite for sells.

If price bars being cut toward the middle by the 9ema=chop
Actually pretty easy and I love chop as it is very controlled market, so I buy very low and sell very high.
More...


I use this approach on longer term time-frame using 50EMA weeklies. If the TA makes sense on two widely diverse time-frames, its most likely completely rational.
 
John9999 said:
days like today just chew me up. I trade emini futures. I have looked at all kind of ways to have a "stay out" alert. Chop index, VIX , VXN, Volume, RSI, etc....

ATR I think makes sense. for the NQ I have back tested a over/under reading of 10. On the really choppy days it appears that I would have not traded or traded much less if I use a reading of 10 as my go/no go rule.

I have looked back at charts now and used this rule and it seems to work.

thoughts please......
More...

The way it usually works...

1. The market is well into chop and giving you indigestion by the time you conclude, "chop".

2. The market surprises when it exits chop, leaving you still thinking it's chop, and you're on the wrong end of things again.

Once you recognize chop, plan to "buy the bottom of the chop range, sell the top of the range" while trying to ignore everything in between.
 
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