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[boatlover]

Hi there,
Im relatively new to this arena,1 year or so but have developed a strategy that I am in the process of automating . The problem is that it works well in trends/ drifts but in small ranges it has problems. Can anyone suggest a indicator that might help me eliminate these small ranges? I have thought about ADX? Any advice / suggestions would be appreciated,
Boatlover

[jotace]

The solution to a situation that all of us had experimented is that probably, it isn't worthy to trade during small ranges with constant changes of direction. I usually wait until the chart escape the range.

[bbjit]

Originally Posted by boatlover

Hi there,
Im relatively new to this arena,1 year or so but have developed a strategy that I am in the process of automating . The problem is that it works well in trends/ drifts but in small ranges it has problems. Can anyone suggest a indicator that might help me eliminate these small ranges? I have thought about ADX? Any advice / suggestions would be appreciated,
Boatlover

Hi boat, here are a few suggestions:
1: try to identify when the market is not trending and don't trade, which can be extremely hard to do..
2: if you have a profitable strategy just take every single entry and KNOWS that sometime the market is not going to trend...as long as you keep your exposure small in these times.
3 try to develop a trading system for a sideways market..

[TheWolf]

I agree totally with bbjit.

If you use ADX, it doesn't really help at all. You can miss trades when a trend develops from a ranging market, and you can get signals when a ranging market develops from a trending market? So it kinda cancels out imo.

[homish]

If you are looking to learn or advance your existing knowledge then e-mail me at myhope@sent.com and I will give you details of a fantastic course coming up in September in Birmingham. This guy is seriously good and he trades live with real money in front of you whilst he teaches. I have learnt so much from.

[bbjit]

Originally Posted by homish

If you are looking to learn or advance your existing knowledge then e-mail me at myhope@sent.com and I will give you details of a fantastic course coming up in September in Birmingham. This guy is seriously good and he trades live with real money in front of you whilst he teaches. I have learnt so much from.

ughh , yes and can he teach me to fly as well please....

[acronym]

Been trying to figure this out myself, but if you happen to miraculously come across a program that can recognise how far a macd (of whatever period) is from the zero line, it may be usefull to filter based on low macd ranges.
Breakouts may suffer, but if the macd is strongly away from zero, odds of nice price ranges increase markedly.
Im not currently aware of anyone , or any program that could make the process less than an egghead's fantasy, coz it's serious math stuff.
Id like to hear differently though, as you would .

[boatlover]

Thanks everyone for your assistance. I am taking it all on board.
Really appreciated.

[overgrowth]

Boatlover,

My theory is also to give the ranging markets a wide berth (pun inadvertently realised) even if you miss out on several opportunities.

If you've back-tested your system thoroughly and it gives say 75% returns in a trending market, then you need an indicator which can tell you the instant you enter a trending market which unfortunately doesn't exist.

ADX is handy and I've posted a similar question on another thread regarding its use.

Though, if you really want to learn the secrets of the FOREX market and make yourself several $million AUD in the next couple of weeks please e-mail me IMMEDIATELY at CastlemaineForex@WhyDidILoseMyShirt.com...

[PittsburghFX]

Originally Posted by boatlover

Hi there,
Im relatively new to this arena,1 year or so but have developed a strategy that I am in the process of automating . The problem is that it works well in trends/ drifts but in small ranges it has problems. Can anyone suggest a indicator that might help me eliminate these small ranges? I have thought about ADX? Any advice / suggestions would be appreciated,
Boatlover

This is a similar question I have asked in the past. I look to see where you are in the future. Keep asking these type of questions and search for all the knowledge you can. Trade the demo like it was real and do not ever make excuses for losses. Have your pride hurt, frankly, kill your pride, then grow yourself up with a disciplined strategy. You are on the right track, so stay focused.

One of the best ways to establish trends is indeed the ADX or average directional index. The con of using this indicator is that fact that you will watch the first big trend from the bottom to the first 1-2-3 pattern in the middle. Buying too low on soley an ADX posture rising is taking a large gamble, however, waiting for the second trend will be much easier. What you can do to pick the bottom is best by Fibonacci price levels and key Pivot Point levels. This will give you price levels to place either close stops or hedge points for buying at the money options at near strike prices either in the futures market or SPOT market, though futures options to hedge has more guarantees than SPOT options do.

Along with the ADX, Slow stochastics with the indicator set at 3,5,5 will help to give you a possible trend reversal at a near bottom. By using all three, ADX, Stochs, and Fib levels you have th best odds of pulling of a bottom trade. I have done this several times, but 1 wrong time can wipe out most of that profit unlessed hedged properly.

Automated systems are best used in long term. Do not expect to automate 10 pip trades. In the long run, it will not work. Start your entire trade by looking at a 1 year weekly frequency, then with those averages and indicator postures and most importantly those weekly fib levels, will play out into your 50 pip trade, trust me.

I have quit daytrading for good, heck I used to teach it, because 6mo weekly hedged with options is fire and forget. In order to trade like this you need at least 15k in a 100k size account. Check it out.

[boatlover]

Overgrowth, I tried to send you an email but it was unable to do so. My email is boatlover56@optusnet.com.au