"consistent profits"? like every day? or every month? Man, I go through very long times without ever so much as seeing the shiny side of a nickel. I think that is why they say, "A wise king counts the cost before going to war." notice how back then, nobody even questions that going to war and winning is profitable?
I no need to deal with chop with my current trading approach and it is highly profitable, it at lease pay for my bill and my life style for the past 10 years. Disclaimer: I don't make few hundred % as other day traders in ET claim they can but it is outperform S&P and I am quite happy with this. Very minimum chart reading is needed but more on the numerical analysis. I did some day trades but it is not my "main trading" but more on killing my boring time while waiting for my main trading to bear the fruits. The whole purpose of this "chop" discussion is to bring up some healthy discussion among the day traders, in which I believe this is more beneficial to them than any "long term" trader as myself. My observation so far is NoDoji is the only one that able to provide some inputs to predict "chop" in future using some candle pattern and history data/pattern from the chart, the rest are either don't have a clue or just saying it is impossible, in which I agree as I never see any trader or institution are able to make the future prediction better than tossing a coin if purely based on the "history chart data", however, I though someone in ET may be different (e.g. our self claimed "hidden" trillionaire trader in ET)
otherwise, I really like the chop vs the trend. I try to set things up so I can survive during the chop (which is most of the time) and make good money on the trend (which is rare.) And that is why I am almost always pissed off and cynical and just generally grumpy. (hey, it's a job and somebody has to do it)
Personally I know many retail traders and about a dozen institutional traders...I haven't met anyone that tries to predict trend or chop via the way you've open this thread. In contrast, they just try to identify the current (in real-time) market/price action environment they're trading and then try to be prepare for different possible scenarios that may show up (good or bad). Reality is that those that approach their trading in trying to predict something for tomorrow...they are not trying to predict if tomorrow will be a trend day or chop day...they are trying to predict something else (read further below). Heck, most days there's trend AND chop. Seriously, you can look at higher time frames and find a tight trading range chop but then lower your time frame and see trends that last about an hour (up and down in the same day). Just the same, you can see chop on lower time frame but lower your time frame more to like tick charts and see trends (up and down in the same day). Therefore, without any real discussions by you, myself or others about definitions and charts...not really going to be helpful although as pointed out earlier their has been links pointed elsewhere that contains more helpful discussions because they do contain definitions, chart examples and so on. Getting back to institutional traders. They will say why are you concerned about "trend or chop" for tomorrow's price action (the prediction factor). In contrast, they're more concerned about price direction and could care less about how it gets there via a trend or chop. Thus, if it chops and gets to the price they're looking for...its a happy day. Just the same, if it trends and gets to the price they're looking for its still a happy day. Just the same, if it trends and chops in the same day (most trading days are such) and gets to the price they're looking for its still a happy day. Simply, maybe that's why you don't see folks doing such...trying to predict if tomorrow or whatever is going to be a chop day or trend day is not needed. Wouldn't they be more concern with price direction ? Trend or chop with price direction only matters for current (real-time) market conditions that you're trading so that you can determine which trade approach to use.
Apropos of nothing in particular, I enjoy these traders who have been supporting themselves with their trading for N years and even consider themselves to be extremely successful yet ask questions that any beginner would know. Jus' sayin'
%%%%%%%%%%%%%%%%%%%%%%%%%%% SureG888; [a]Study a huge number of trends, study trend much more than chop- slop-small stop,LOL. How old is the trend??????? Some markets have much longer[average] trends than others NOT predictions ; probabilities.................................................................................... [c-z] WHAT is the long term trend[200 day moving average]?? And bull or bear?????
Markets are always trending. Find the time frame that is trending best and trade it. Forget about so called ranges.
A lot of times it's pretty difficult to know chop from real action. But I know that there are tools for indicating where chop most likely is, and I use them: volume profile and market profile. Unless I see a good setup, I tend to only want to trade outside the value area either expecting reversion to POC or a breakout (based on the action seen).
btw.. nice healthy discussion... Yesterday was the a nice outlier. in one way... on thursday at close.. SPY shot up... so consensus was a big movement day... it crapped out... and was sideways... put/call holder.. directional plays for OPex.. got massacred... the anguish i saw on twitter.. aghast. they were - markets have only one goal-- MAX PAIN for the sheep and profits for the MMs/Big Boys.... ha ha...