Do you have different strategies for different market conditions?

Hellooo! :blush: I’m still in the process of looking for strategies to try out and use and I was just wondering how you guys adapt your trading strategies for different market conditions. :thinking: Like, do you have a completely different one for trending markets? Another for ranging markets? Or do you just tweak them a bit? :smiley: Which would you recommend? Thank youuu!

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I had considered having 2 strategies. One for trending environments and one for range bound environments. In the end I just used trend following and ditched the other.

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i’ve been doing the same, for decades

my one for ranging markets is “sitting on my hands” (or “going out for lunch,” or whatever you want to call not trading!)

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I’m in the only trending camp

Sometimes I use the Keltner Channel 20:1 to remind me. I fill in the channel bluish grey and call it ‘the river’ so I don’t trade in the river and get wet!
OMG that sounds like I’m some kind of ‘special boy’ :upside_down_face: :joy:

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Long term profitability lies only with Trend trading - any market. And it’s so simple watching order flow move price action.

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Hi, I am working on it on gold, there is so much combination to check so I am focusing only on one instrument. Regards Greg

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by the way, identifying “different market conditions” isn’t always easy!

if you know with certainty that the market’s trending, in your timeframe, you can easily make overall profits using just a moving average (even with an ambitious R of around 2.0, you might achieve a win-rate as high as 40-45% - obviously hugely profitable over the long term); if you know with certainty that it’s ranging, you can equally easily do so just using almost any simple oscillator (your R might perhaps only be about 1.0, at these times, but you can maybe achieve a win-rate as high as 65-70%, which - again - is obviously hugely profitable)

the position-sizing, stop-losses and targets will obviously need to be very different in each case

we have to adapt to our perception of market conditions, and be right often enough - however “often” that means in our own circumstances - for our net profits to outweigh our net losses

when it transpires that neither plan outlined above is actually profitable over the long term (which is normal :laughing: ), it isn’t because the strategy or the indicator “didn’t work”: it did exactly what you set it to do (unless you’re using MT4, I suppose, in which case even that may not be true!! :open_mouth: ), but it’s because you used it at the wrong time in the wrong conditions - in other words your “knowledge with certainty” was mistaken

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Thank youuu! :smiley: I see that a lot of the members just opt to trade trending markets. But just curious if there was ever a time when there were only ranging markets and people had no choice but to trade that ranging market. :open_mouth:

Hahaha! :smiley: So it’s “cleaning my desk” for me. :sweat_smile:

Had to look up Keltner Channel cause it’s the first time I heard about it. :sweat_smile: Learned something new, thanks Johnny! :smiley:

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As @flamingoproxy said, it’s best to avoid trading or look at a different instrument to trade.

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Thank you guys! :smiley:

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Generally, what should be a goal in trading? risk diversification, how to achieve it? trading on different time frames, instruments by different strategy types and directions.

Many is the day when the 5mins chart is ranging (and in ‘the river’ :rofl:) but the 1min chart is giving lovely little micro trends.
I only trade 5mins/1min but I’m sure this can be found on larger timeframes eg 4hr ranging and 1hr with nice trendy swings?
I don’t know how you higher timeframe guys handle the boredom, I get bored with the 5mins. :rofl:

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P.S @ria_rose and don’t let anyone tell you that MA crossovers don’t work - look at DOW today 5mins 8EMA / 20SMA easy 150pts (keeping out of the river) :wink:

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My favourite strategy for ranging markets is the return to ema strategy. Watch the King of forex videos on YouTube to see it in action.

It works on any time frame, but not sure I’d try the cost averaging on higher time frames. I think getting out when the range is invalidated is safer in that case

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It’s great that they work for you, but they don’t work in general. If you can filter out the false triggers from the good ones, then that’s great, but it’s very hard in real time

Just take a look at the DOW 8EMA/20SMA crossover now! 8.30pm uk time

I don’ know why you have to make it so difficult, convincing yourself that crossovers dont work and adding to losers is a good idea.

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There’s loads of times when they work. And loads more when they don’t. There’s a reason MA crosses are most people’s first strategy and not most people’s strategy. It’s because they don’t work.

A day when price makes big moves in both directions is the exception. When price trundles along, you can get 10 plus crosses in a day and they all lose.

10 plus crosses in a day - yes when it’s in a range.

Ok today was a big move but they don’t have to be big moves, 20 points is quite acceptable and certainly not exceptional on indices 1min chart.

There’s loads of times Fibonacci works and loads ot times it doesn’t.
If you read my previous post you will see how I avoid ranges.