hi guys please throw some scraps to a noobie. can you point me in the right direction? what kind of time frame/strategies should I be thinking about?
Reversion to mean can work, but you must be aware that in a low volume environment there can be vey few trades worth taking. Things dried up a lot for me in April/May 2009 and onward, with the exception of May 2010 maybe Feb. 2010. Knowing when to sit out is almost as important as knowing what works. There are strategies that work in the current enviroment .... I'm not saying I have it all figured out but the market is 90% complacent these days. You can have a big move and then the activity will just die. There is an edge there.
Time frame: if you want a truly great sharpe ratio, you can't beat daytrading, but with the current low volume and wider spread in stocks, that game is becoming more difficult / you have to be more selective.
I am a noob too. Tinkering with Amibroker & IB. Reversion to mean is only thing I know about a bit and various MAs are the only tools I use sometimes with filters like MACD & RSI. But I get my tail cut off in whipsaws many times.... filtering out those periods ruins best entries too.... Learning to trade in sideways markets is one thing I need and am looking for another sentence....not reversion to mean....something else...for sideways market....maybe not as horrible as the one as bone depicted...but yes....essentially similar Can you guys please oblige with pointers about what I should look into for trading in non-trending markets? With best regards & thanks. Sanjay.
You could start by looking in the Journals section - there are a lot of good traders that call out their stuff every day. People trade: Pairs Breakouts Reversions Open/Gap/OPG Momentum/Follow Through Arbs It really depends on what markets, time frame, platform/broker you are on, etc.