how can i avoid sideways price action

Here you go guys Mr.RedNeck over here has figured it all....

Thanks man...

 

Thanks Xelite.... Given that i'm a newbie this should be very usefull

 

You are welcome, have a good weekend.

Redneck, your last advice was....priceless, to say the least!

 

RN

 

I'm sorry but this is another false but strangely popular notion that has no basis in reality.

This was the exact topic of my masters dissertation. "Can adding an ADX filter to technical trading strategies improve returns?"

The short answer is that adding ADX filter to breakout strategies is actually detrimental.


All 40 day Breakouts with ADX above 40 = (-0.18%) average 10 day return.

All 40 day Breakouts with ADX below 40 = 0.42% average 10 day return

 

And how do you mathematically define a breakout, for backtesting purposes?

 

Sideways action is part of trading, is like rain or thunderstorms, it cannot be avoided.

Anyone who claims otherwise is just offering his Kool Aid.

 

You cannot control the market but you CAN certainly choose to trade only when the financial instrument is above (or below for short positions) two moving averages, 20 and 50 for example.

That way you eliminate all financial instruments (stocks, commodities, currencies, etc..) that are going nowhere and will just waste your time.

Personally that's how I trade.

 

Just because you enter in a non choppy environment does not guarantee that chop wont come going forward.

Stop this nonsense its unavoidable.

 

No, nonsense is entering a trade in a choppy market and expecting the choppiness to cease.

That is nonsense, Einstein!