Linkon's guppyBB system...!

[DanPickUp]

So what is the solution ?

How to identify or avoid day trading sideways.

The solution is not to care if it is going to be a sideway day or a trend day.

The solution is to be prepared of both. How ? That is the question.

 

[linkon7]

Yes you may also need to confirm with with DPO, MFM, EOM, HPI, Mass Index, PVI< PVT, and RMI. When all these are in confirmation, then the markets are in a trending phase..... though this would occur roughly once in 76 years, that too on a sunday.

Come on guys, the more the indicators, the more quickly you will have to replenish your account. Or as they say, you will have that many more reasons to blame the market. Indicator facination lasts for about 3 to 5 years. And if the trader survives that period with still enough capital to trade, then he starts real learning.

I think what Jagan was trying to point out is the use of adx to identify sideways market from trending...!

indicators are like double edged swords. Too much dependence on them is harmful. But if used wisely and in a manner that compliments the system, its a very potent weapon.

 

[sumosanammain]

The solution is not to care if it is going to be a sideway day or a trend day.

The solution is to be prepared of both. How ? That is the question.

I would say the solution is to develop a system based on price bars that gives a maximum of 2 to 3 trades per day and that too on some sideways days it should not trigger trades at all, based on maybe a filter that is based on ATR. The lower the reading, the higher the filter.

 

[DanPickUp]

I think what Jagan was trying to point out is the use of adx to identify sideways market from trending...!

http://www.traderji.com/advanced-tr...-swing-trading-using-ma-rsi-5.html#post515935

It was also discussed here.

 

[DanPickUp]

I would say the solution is to develop a system based on price bars that gives a maximum of 2 to 3 trades per day and that too on some sideways days it should not trigger trades at all, based on maybe a filter that is based on ATR. The lower the reading, the higher the filter.

Thanks for your idea. As this thread is about BB trading, I may pushed the thread in a wrong way and sorry linkon for that. I will stop here.

Still, the main question posted from JK is surely worth to start an other thread about this specific subject.

We may see us over there again

DanPickUp

 

[linkon7]

Normally sideways days provide excellent low risk - small profit trades. Key is to identify the sideways days early and then use a fading system to to get in early.

Instead of ATR, we are using STD deviation. Both measures the volatility. Now combining two volatility indicators that uses different parameters we can roughly guess the turning point where the trend matures. most of the time, it works awesome and sometimes it just backfires.

I was able to get a good exit for my short today, just 3 points above the LOD. But i couldn't anticipate at 120 point straight bounce from the low. I added shorts at predefined levels and both hit a predefined SL...

Does it mean the system failed... ! I just have to accept the loss of the last 2 trades as part and parcel of following a mechanical system. such big moves against the trend is rare and does not need any system alteration...!

 

[jagankris]

I have already tested this method long time back. Method was good... i forgot why i gave it up. I remember using BB(5,0.5) instead of ema. Problem is when we have a one direction move...all such indicators are king, but when it comes to choppy market, it has a habbit if tossing u around. do let me know what you experience has been so far....!

For trending markets I don't rely upon indicators I rely upon price as price is the only leading indicator and all other indicators lags so I dont care much.

Let me put my understanding about sideways markets

1.It could be lack of interest in a particular stock at a particular point of time.
Hence low volume - it is definitely a good indicator.Pls note the bull bear volume.It is a good indicator but lags.
But ADX can be used to catch this lag in volume momentum.

2.It could be consolidation and SM trying to accumulate or distribute or wait and watch for market's reaction at a particular price range.
So trying to keep it in a range before moving it in the pre determined direction.

Markets could be either trending or in a range bound where the price shows lack of conviction.

My experience with Sideways zone

1.I always get caught in to sideways markets invariably on any because I trade 1M/2M Tf.
On any day there will be periods where IM tf will be in sideways .

I guess Linkon Ji is also trading 2M TF and hence should be facing the same problem as I am.

2.Most frustrated in finding a solution to get rid of this problem.

3.As tnsn said I mostly use the market pulse to determine if markets are in
sideways because couldn't find any logical solution for sideways.

4.Then came ADX and Bull bear volume which gave glimpses of identifying the sideways zone.

1.If ADX < PDI and ADX < MDI and ADX < 20 then markets are sideways.
2.If ADX > PDI and MDI and PDI and MDI < 15 then markets are sideways.
3.Higher ADX readings and ADX less than ADX ema and PDI and MDI difference less then 10 then sideways.
4.Low Bull bear volume - sideways.

Trade intensity or COT - conviction of traders indicator - No of trades in certain period of time say 5 seconds.
I am not sure for I don't have tick data.

As of now I use ADX+BULL Bear Volume + discretion to guess sideways

Note :- I will not discuss any further about sideways here as Dan hinted it deviates the main purpose of this thraed .

 

[linkon7]

1.I always get caught in to sideways markets invariably on any because I trade 1M/2M Tf.
On any day there will be periods where IM tf will be in sideways .

I guess Linkon Ji is also trading 2M TF and hence should be facing the same problem as I am.

2.Most frustrated in finding a solution to get rid of this problem.

Please understand that trend exist is all time frame. Each time frame can have a different trend. So shorter the TF, more prone it is to whip you around.

preferably shift to 5 min or 15 min for intraday. personally, i use 15 min tf only...

 

[columbus]

Please understand that trend exist is all time frame. Each time frame can have a different trend. So shorter the TF, more prone it is to whip you around.

preferably shift to 5 min or 15 min for intraday. personally, i use 15 min tf only...

Avoid SHORT time frames in closing session.
Considering 6 hours of trading , different time frames gives different candles as:

Minutes Candles
1          360
2          180
3          120
4           90
5           72
6           60
7           51
8           45
9           40
10          36
11          33
12          30

I personally prefer 5 to 9.

 

[jagankris]

Please understand that trend exist is all time frame. Each time frame can have a different trend. So shorter the TF, more prone it is to whip you around.

preferably shift to 5 min or 15 min for intraday. personally, i use 15 min tf only...

Thanks Linkon ji.

I misunderstood your post that you use 15M charts for trend and 2M tf to trade in the direction of 15 exactly opposite - So you use 15M charts and 2M tf to time your trade .

I will try to shift to 5m though I don't have much patience .