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Old May 1st, 2005, 01:59 PM   #1
Yag
 
 
Join Date: Apr 2005
Posts: 10
Hello all,

I am doing my first newbie attempts as far as creating (I'd even say goofying with) my own trading systems.

I have noticed that the principles that work during trending markets wont during the chop, and viceversa.

How could I express in conceptual terms (as opossed to computing terms, I know nothing about that) so a trading platform could apply one set of rules during a trending market and another set of rules during the chop?

The only idea I have come up with is requiring an initial filter, like price moving above over an EMA for a set number of periods in a row in order to apply the trend principles, otherwise apply the chop rule set. Any other ideas guys?


Cheers.
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Old May 16th, 2005, 12:07 AM   #2
kut2k2
 
 
Join Date: May 2005
Posts: 4,028
Use Perry Kaufman's efficiency ratio, the perfect trend indicator.

Use the unsigned version.

If it's greater than +1/3, you're in an uptrend. If it's less than -1/3, you're in a downtrend. If it's between +1/3 and -1/3, you're in the chop.
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Old May 16th, 2005, 12:39 AM   #3
John Merchant
 
 
Join Date: Sep 2004
Posts: 994
Just like it is always happy hour SOMEWHERE, it is always trending in SOME timeframe. Chop is totally a matter of perspective. It is like beauty. If you get close enough to a fat girl, she doesn't look fat.
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Old May 16th, 2005, 01:16 AM   #4
Bowgett
 
 
Join Date: Jul 2004
Posts: 924
Or develop two systems. One for trending market and one for choppy and trade them both. The trick is the system for trending market should not lose much in choppy market, same with the system for choppy market.
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Old May 16th, 2005, 06:11 AM   #5
Equalizer
 
 
Join Date: Jan 2005
Location: London
Posts: 1,546
Quote:
Quote from John Merchant:

Just like it is always happy hour SOMEWHERE, it is always trending in SOME timeframe. Chop is totally a matter of perspective. It is like beauty. If you get close enough to a fat girl, she doesn't look fat.
John,

do I detect a proclivity towards females of above average girthage?

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Old May 16th, 2005, 08:10 AM   #6
John Merchant
 
 
Join Date: Sep 2004
Posts: 994
Equalizer. I get my best trading ideas from my sexual proclivities and fantasies. I rarely post sexual analogies to trading any more because I get hate mail from ET females, or at least ETers who write like women. Perhaps it is just a happy accident that I can approach trading sadistically and take visceral pleasure in winning at some one else's expense. But to your point, ever since I was ten, lo these fifty years ago, I have realized that the woman chooses. Like the market chooses. All you can do is be available and ready. Fat girls like me. What can I say? Scalps like me. In either case it's over quick and you move on to the next opportunity.
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