Hi guys,
I am trying to find a way to solve this. I know, it is close to solving a holy grail (whipsawing), but maybe one of you have some thoughts on minimizing the lost trades.
I know the picture doesn’t give you much, but I kept it basic.
Did you came across it and how do you deal with it.
Thanks!
Grazy ideas are welcome…
Not solve it… but here is what I do:
When volatility is rising usually price is signaling that a strong move is about to begin, price shakes out weak longs and shorts
So, there are two choices trade or not trade… if I trade then I reduce my position size and widen my SL and TP
If I do not trade I wait for a strong move and start to trade in the direction of that move:
It looks like you’re chasing price after the fact with no real direction. If you look to “buy low, sell high” then you often make pips weather price continues it’s trend or not…using s/r for targets and/or removing risk there. Hope that helps.
…and a directionless market will often hunt stops just outside the range.
Yunny1,
Great response. Makes total sense. I also thought to wait it out. But when to know when to wait it out, and how to tell my script to do that. But, I accept the first two trades as losses, the third is being kept with indeed a larger SL. But somehow it feels like there is more. May I challenge you to continue to brainstorm. I can make you a nice indicator with what we came up with.
MAs are not really helping, as they tend to consolidate in these areas, so adding one doesn’t really help.
ATR isn’t clear either.
MACD is not quick enough.
What I haven’t tried yet is Price ranging, when that consolidates this is may be a sign that it will whipsaw.
This has been bugging me for a long long time… Normally I just go for a larger MA (this is 21 SMMA and 200 SMMA on M5) but you save loss trades, but you lose on the entry and exits of trades.
PS I appreciated the time you took to draw it in the picture…
Petefader,
Thank you for your thoughts. I’d like to keep the trade I am in as it normally continues to follow the trend, but I don’t want to miss on fake signals. I have a little trick that I haven’t implemented yet (bit crude technique) and that is to ignore the first break-out, but that means in this case that I am already halfway the move…
I also considered two slower MAs and not to trade when they closer than a certain distance, this helps but not on the nasty ones.
Anyway, I can’t complain. The script makes pips, but if I am able to increase the win/loss ratio I can implement other MM rules.
I didn’t realize it was an EA. How to deal with ranges with a moving average trending system…it’s an age old question. I’ve never seen an answer lol. They simply bet on the trend and it’s win or lose I guess.
Aahh, I will do all that is needed to solve it. I am not restricted to MAs. But yes, this is a simple EA and if I am able to identify a ranged area early it will do well.
It is just an old question that pops-up once in a while. And now it is the seaons again…
But perhaps it is easiest to have a signal for the trend and stick to that signal, excluding the false positives in the ranged section. Ill provide an update when I know more… Thanks for the thoughts.
Well, I think i made some progress in the early identification. Two signals before we enter the ranged area. Not there yet, But at least this gives me hope.
If the ATR isn’t giving a clear signal, how about a shorter term ATR and then have a rate of change of the shorter term ATR signal?
This 1st derivative of the ATR should help identify the rising volatility that yunny1 is showing
Your post triggered me to try some periods. ATR is new to me, so I need to test what suits best, the 8 seems to work out for me. But I also ended up with three ATRs, and I think I will also try to: when ATR8>ATR20>ATR50 = signal. and vice versa.
Thanks for your input!
Okay, I THINK that I have seen something now, that I missed all along. In my quest to identify ranged areas, I cam in to the realm of MA shifts. Meaning, You use older values to trade one. Give it a try, the 90 SMMA ma_shift 200 on the eurusd does give better entries and exits than the shift 1. In any case, I thought, great. That helps me to filter out some unrequired fake signals. But than it hit me. When you use ma_shift 100, you can actually see in time where your stops might be. 200 bars ahead. I am still working this out, but I wanted to share the thought.
Here is a pic iff the 90 SMMA MA_shift 1 on a M5 chart, with a ranged area ahead.
And here is the 90 SMMA M5 MA_shift 200 in magenta added. I changed the green bars to gray. You see where your stops will be in 5 200 bars and that it will start ranging. Have an opend mind and play with it a little. You may like what you see.
Here, another one:
With the MA_shift 200 I would have skipped the losing buy and could have continued with the profit sell (First two exit/entries), and ended up with the same exit for the prodit sell (Third exit). Magenta (purple) is the MA-shift 200. This would have been an extra 15 pip profit, instead of a 35 loss. That is a 50 pip difference. I am just enthousiastic about this finding.
And another another one…
To be honest, in this case the entry of the first sell would be worse than with the normal MA, but it saved me two loss trades. I have no problem with that. So pipwise neutral, but two loss trades missing.
Hey Toe, check out an indicator called " Damiani_volatmeter"
think it will solve your problem!
Hallo Toekan,
How did this end up?? Does it still work for you? I have a similar problem.
