Choppy Markets

#1

Hi all,

I wanted to point out that I have been doing really well on days where the market is trending. Today however, TF chopped around for the most part and I found myself getting stopped out all day. The trades I placed were attempts to scalp (ie volume confirmed and atleast three bars up or down preceding the entry and following MVP trend. I’m trading TF APEX MVP on 14 sized diagnostic bars.

Almost after every trade, TF immediately moved against me and I got stopped out, for a total loss of $550 for the day (ouch). Is there a way to avoid getting chopped around and still being able to place trades (eg smaller bars perhaps)? Or is the better approach to just sit on the sidelines on a choppy day?

Appreciate the input, thanks.

#2

Hey jnash,

Have been doing the scalps on TF as well, and agree the trending days are best. I try not to get into scalps if there has already been a few bars formed, my experience is that I get stopped out as well. Chop for me is pretty much hindsight, and hard to see early on (not there yet). So, for now I stick to entries on the first bar on turns and will stretch out my entries with continuing volume. I definately miss out in adding on each bar in solid trends, but miss out those losers in choppy days. Also, move my stop to breakeven if up 7-8 ticks on TF. To me this seems to be the most consistent way to trade my scalps. I am watching GC and CL as well and again only taking entries on the first qualifying bar that turns.

Have tried to take all qualifying scalps and let the winners and losers balance out, but have had mixed results as well. Some days are awesome, others not so much. Looking at abc and 123 rules and qualifiers cuts down on bad entries. Yogi and Darrell, have given me some advice on the topic in past threads. Interesting to see what others are doing as well.

Mark

#3

What is the three bar up down rule your mentioning? we stop entering 3 bars before a 1 dev level but beyond that I am not sure what you are referring to?

One tip i can give you is its not just trending days. It also days where you are really consistently blowing away volume that sort of gives you that heads up on it

Another tip - don’t be surprised to see the market chop around deviation levels - most often the settlement, and then + 1 , -1 and 1 high to low as they are strong support resistance levels. I imagine most of your trouble came from the chop around settlement.

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Something else you may want to check out is the choppy market warning indicator:

Learn more here: http://apexinvesting.net/forum/technicals-128/apex-choppy-market-warning-[video]-144.html#.VCRwkfl318E

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#4

When scalping I generally look for at least two/three preceding bars confirming the direction of the momentum, confirmed with volume, and then I enter the trade. Since scalping is essetially a momentum/very short-term trend trade, I like to see some directional momentum beforehand (i.e. I wouldn’t try to scalp the Pivot bar just because volume is exceeding).

Today was another bad example of getting in too late, getting stopped out, and then only to watch the market continue back in the direction of the intended scalp.

#5

The issue with that, is exactly what you are seeing. If you wait for 2-3 bars to confirm the direction, then wait for another exceeding volume bar, then wait for the next bar to break that and then enter, you may be missing out the entire scalp opportunity. The Momentum Scalping System does not have any rules that require waiting on multiple direction confirmation bars before entering. So on choppy days , you are entering too late if you are waiting that long, as you have noticed.

#6

so then how does one determine in which direction to scalp?

#7

Have you gone through and watched the training videos on the Momentum Scalping System? Not sure what you are asking. IF an up close bar has exceeding volume and the next bar break the high of that bar we would go long. If down close with exceeding volume, we wait for next bar to confirm same direction and go short. Can you clarify your question and maybe can answer it better for you. But, make sure to watch the Momentum Scalp Section of the Elite MVP Training Course and then let us know if there are questions we can clarify for you.