Probably the best way to avoid chop is another simple indicator -- the, "Oh the markets chopping so I'll sit this out until I get trends again" indicator in your brain.
well, my strategy isn't glamourous, i take very low risk trades and make 8-25 cents/ trade usually- i just do it on a lot of volume- when i am efficient, i make usually 2 cents/ share net- when you trade over 100K shares/ day, it adds up- sure you can do the math- it is boring much of the time, but its about making money, not being entertained....
New periods of trend (or chop) are not obvious until after the fact (unless you're psychic) so how many bars into one such new trend (or chop) period does your mind recognize this situation enough to give you the "ah-ha" experience?
Futuresnut, If I notice that my system is getting whipped like a red-headed rotten step-child, I will stop trading and wait for some kind of breakout or major oscillations to begin.
I've enjoyed reading the posts on this thread. Lots of wisdom and experience being dispensed. My two bits, as follows: IMHO the markets will beat you up and take your money and tear you to shreds over and over until you begin to learn who's boss. You MUST learn how to listen. You must be able to focus on what is happening AT THAT MOMENT. IF the trade doesn't seem right, get out. You'll know if it is right and learn to stay with it. You must find your OWN way of trading. There are millions of different ways of trading. What works for Joe may not work for Mary Sue. Some trade futures, some nasdaq, others go with listed stocks, whatever. When I was most successful at trading, I was making money consistently, but I was BORED. Maybe bored is good. Also, remember the post that stated the quiet traders were the ones making the money. You'd never know if they were up a million or down. Take quick losses. Don't try to trade like your new good trading buddy who's supposedly making millions if you don't understand what they're doing and it doesn't feel right. My best month was one of the "top" trader's worst months. I like using the tick and trin. Other traders have no idea how to use it, or what it's for. I'm relying more and more on Time and Sales. I always try to use volume. I like using candlesticks and moving averages. I prefer SIMPLICITY and CLARITY. I used to love using stochastics and I used to pore over charts nights after nights. I was in love with charts. I would dream about charts. Right now, I'm stepping aside. I'm digesting what is going on in the markets. I have a plan, and I am VERY patient. I am watching and I am learning and I am listening. I was in circuit City the other day buying a new laptop and after talking to the salesman found out he was trading. Said he only started 4 months ago with $7,000 in an Ameritrade account. He had made over $120,000 trading wcom...(the past summer....said he bought many shares at .13 and sold around .53). Said he knew it would bounce.....Listening to him, I remembered what I used to feel about trading....that it was like winning the lottery everyday. I don't feel that way anymore. To me, it has become like a business. A boring business....thinking of that kid, he was only about 20 yrs. old, I wished him luck in all the things he was doing in his life....working full time, and going to college full time and just beginning Day Trading......and I thought he will probably have to lose big time one of these days if he is going to stay with trading.....on the way to finding "the holy grail"...it is simplicity itself. Any comments? Are there people out there who are successful from day one and never have gut wrenching losses to learn from? Most traders I know have had some very big losses in their trading careers.....a lot of times from "thinking" what the market would do and not listening to the market. The "holy grail" of trading.....I've had "moments" of eureka! when I knew I had it, I just knew it! I had the answer! Then slowly, but surely, it faded away. My great moments of joy and ecstasy were replaced by fear and apathy. Now in my moments of sanity and clarity I feel very removed from trading. I am not emotional about it any more. In fact, all I used to think about and talk about was trading, trading, trading!!!.....many times to the utter dismay of my family. I usually don't talk about trading very much anymore. Sometimes my interest and curiosity is peaked, but the intense fascination and all-encompasing concern has been replaced by a feeling and knowledge that I have to be well balanced in other areas of my life. I'm very involved with family and friends and travel and church. I also have the knowledge that if I am meant to trade, I will trade, if I am to become more successful at trading it will happen. I am ready to "move" onto the next level. Balance is important to me at this point in my life. Trading is important to me, but I do not feel "rushed" about what I need to do next. It will happen. Many traders are constantly evolving. The market changes and so traders must change. I am changing. We can help each other. There are posts here that I read and laugh about, others that I read and say to myself, Yes! I know what they are saying...I can identify with that....other posts I read I think , Gosh, how silly or mindless, but ... anyway, every now and then I have to write what I feel and experience down on paper.......Oh yeah! Keeping a trading journal is a Great way to help one learn how to become a better trader. I always relearn stuff from reading my trading journals and notes. keep learning and growing and really, thanks to all of you who share your insight and knowledge, it is much appreciated.
topmo, Damn, I lost some on WCOM. You wouldn't happen to know which Circuit City this kid works at? The least he could do is thank me for giving him some money.
topmo, congratulations..really. you and i are black and white when it comes to trading. i'm walking around blind without a cane, pal.