I've been playing around and experimenting with various systems for a while now and from my own understanding, there appears to be two broad types of Market conditions. trending and ranging.
I've only ever succeeded in designs systems (or a suite of different trading systems) around one of those market conditions, but never both.
Trend based systems (e.g Moving Average based systems) work well in trending markets, but drawdowns come thick and fast in a ranging market as you get whipsawed in and out.
Ranging systems (e.g the grid scalping type systems) are lucrative in range bound markets, but once the market begins to trend strongly, they too result in quite severe draw downs.
The main angst is that I've never been able to sufficiently detect in a timely matter (before profits get significantly eaten into), when market conditions for a particular system, (the system is not fit for current market conditions) change and when I should stay out
vice versa,
I've always had trouble detecting in a timely matter (before a significant opportunity to profit is lost) when market conditions are now ripe and when I should get back in.
The question I wish to ask the panel is...
Does anyone have a concrete set of rules to determine when to either stay out -or- when to dive into your tool box and grab another system more suited for current market conditions to trade?
I've only ever succeeded in designs systems (or a suite of different trading systems) around one of those market conditions, but never both.
Trend based systems (e.g Moving Average based systems) work well in trending markets, but drawdowns come thick and fast in a ranging market as you get whipsawed in and out.
Ranging systems (e.g the grid scalping type systems) are lucrative in range bound markets, but once the market begins to trend strongly, they too result in quite severe draw downs.
The main angst is that I've never been able to sufficiently detect in a timely matter (before profits get significantly eaten into), when market conditions for a particular system, (the system is not fit for current market conditions) change and when I should stay out
vice versa,
I've always had trouble detecting in a timely matter (before a significant opportunity to profit is lost) when market conditions are now ripe and when I should get back in.
The question I wish to ask the panel is...
Does anyone have a concrete set of rules to determine when to either stay out -or- when to dive into your tool box and grab another system more suited for current market conditions to trade?
