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?
The only price action where I care about volatility is rocket ship patterns of sharp increase/decline and where can I reverse position(half my trading is reversing thru-out day session or take new position counter-trend, or hedge open profits of a position(timeframes of greater than 29 minutes). I trade fair amount of options and most of the time I am a "Buyer" seeking profit(yes, when most people say their tests show it not to be done much, that is direction I study)/or hedging, so volatility means it going to cost me more and that is ok as I have done so since 90s.
I have "lived" risk management since 2010 and options since 2014 for profit. None of my back testing concludes that low volatility will fit my tight standards of low losing percentages, but volume does, so I have seen often times where there is little price action then BAMM volume increases and takes off, the market will often show whether few minutes to seconds of impeding move. Now whether the move will be one-two points in ES which is often where I dump half of position of originating signal entry(I average down on every signal) or be twenty points, can never tell, but longer one studies, eventually you discover something that always been there but only now understanding, I never run out yet.
I find Al Brooks material too frustrating for me and I become "deer in headlights", I have learned my weakness in my life and when to avoid areas which will dumb found me and if I can't understand it at my age now, most likely it would not fit my concepts of price action.
One huge secret of trading, does not matter much what you use for trend, but stay consistent, new traders always bouncing around, forget that, learn how long you should stay in a trade that is going no where instead of taking a loss, find what can be consistently made and not homerun trades, take profit as your rules dictates. Learn support/resistance for entries, but they are there also for getting out and even reversing. Learn to trade with the trend first, scalpers usually the ones who do counter trend most- I was wrong long ago to go that direction first, enough years and live trading, you learn.
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
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This is a problem with most who look at the chart, they want a system when I was showing trend, arrows show that price bars are TRENDING by most of the bar is above the 9ema for uptrend. I use a term I picked up as being a "Freebar" where none of the bar is touching in this case 9ema. I no longer give out signals or where I entry as unless you are a scalper, where you get in should be done by the trader.
9ema is not 100%, but what is, this morning showed Megaphone on 2 minute and to me says no breakouts and buy very low and sell very high as price will take out H/L's by a tick min.
I stopped with "big heart" long ago when vendors trying to sell ideas or ways. The forum is very diverse and Hedge fund managers here and many vendors of systems and platforms. I tend to like to study areas where most say it is impossible to do.
