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Choppy market index: any good ideas?

  • #61
  • Oct 12, 2017 2:44pm Oct 12, 2017 2:44pm
Quoting mambomango
i measure the choppiness by looking at the candle color over all 28 currency pairs. 2 or more bullish/ bearish candles in a row let the indicator go down. in this case the pair is not important the indi will show the same lines on all pairs. the colored lines are the 8 currencies and the black line is the whole market. its interesting that timeframes from M30 and less are constantly choppy while H4 and more have "trend" and "range" periods. you get the same results when you just measure the movement of one currency pair. what people understand under...
I think you're on the right track... I think calculating choppiness by looking at an individual pair is trying to fit a two-dimensional solution to a three-dimensional problem. I like your approach and it can be simplified by using a derivative of RSI, Relative Currency Strength (RCS).
Attached File(s)
File Type: ex4 Relative_Currency_Strength.ex4   41 KB | 434 downloads
  • #62
  • Oct 12, 2017 2:45pm Oct 12, 2017 2:45pm
Quoting GoldTheHun
{quote} It was just a thought, seeing so many people fail. I have coded an indicator which collects traders real time transaction data from forexfactory and myfxbook. Trading opposite to the sentiment clearly creates an edge. I couldn't explain the reason for that. That is why I have come up with the idea. That is my edge for now, but unfortunately it is not based on my analysis but only based on exploiting the retail sentiment vulnerability... So I can not say it is my own talent..... Watching this indicator is unreal. If you see the retail traders...
hmm interesting i think this guy was trying to do something similar couple years ago,"trading against thy fellow trader", he deleted a lot of his posts tho https://www.forexfactory.com/search....rchid=36119587
  • #63
  • Edited 3:52pm Oct 12, 2017 3:04pm | Edited 3:52pm
Quoting Nicholishen
{quote} I think you're on the right track... I think calculating choppiness by looking at an individual pair is trying to fit a two-dimensional solution to a three-dimensional problem. I like your approach and it can be simplified by using a derivative of RSI, Relative Currency Strength (RCS). {file}
could you explain how to simplifie this idea with RCS?
the RCS algorithm is period based and in my eyes not useful. imo its much more efficient to analyze one candle instead of looking how the candle is formed.
the problem is you have to code all the useful indis by yourself. there are not one standard algorithm in my indicators, i would use them but i couldnt find even one that gives you an edge.
  • #64
  • Oct 12, 2017 3:13pm Oct 12, 2017 3:13pm
Quoting metta87
{quote} hmm interesting i think this guy was trying to do something similar couple years ago,"trading against thy fellow trader", he deleted a lot of his posts tho https://www.forexfactory.com/search....rchid=36119587
The link you have posted does not return any results.
Anyways, what I am trying to say is that there is a strong current against the retail traders. I am not talking about retail traders in retail forex brokers. These forex brokers transactions don't even effect the real interbank currency markets. They act as market makers only. You lose = they win and vice versa.
In inter bank markets the orders are always increments of 1 lot. If a broker accepts less than 1 lot, it is a market maker. Which means you lose = they win. Ecn, stp are all gimmicks... Anything less than 1 lot = market maker......

But interestingly the retail money in the interbank markets probably are known some how. Either by lot sizes or by other means, I truly don't know. And I guess the myfxbook and forexfactory traders have similar sentiments so that the trade spikes almost always end up with prices going the opposite way.

In markets you need losers so that winners can make money. So I guess this is maybe one of the ways for the big fish to eat the small fish....

To Pip: I apologize for writing about a subject which have nothing to do with choppy markets. I believe you are one of the brightest minds in FF and I really enjoy anything you post. I am just wondering if my theory is even close to being true, your brilliant efforts would be in vein....
  • #65
  • Edited 4:17pm Oct 12, 2017 3:57pm | Edited 4:17pm
Quoting mambomango
{quote} could you explain how to simplifie this idea with RCS? the RCS algorithm is period based and in my eyes not useful. imo its much more efficient to analyze one candle instead of looking how the candle is formed. the problem is you have to code all the useful indis by yourself...
I mean simplified in the regards that it's an oscillator with min/max range ie. index. RSI is calculated by price change and RSI = 50 means the pair is trading sideways. RCS = 50 for both base and counter currency mean very strong sideways market or lack of trend.

Here is the source.

Edit: Lack of RCS divergence also means strong sideways market. So perhaps the choppiness index could be a derivative RCS divergence.
Attached File(s)
File Type: rar RCS.rar   8 KB | 388 downloads
  • #66
  • Oct 12, 2017 4:41pm Oct 12, 2017 4:41pm
Quoting RondaRousey
Some good discussion here. Choppiness occurs when it is trying to reach equilibrium. Where is equilibrium?
choppiness is the change from one market condition to another. one forex pair contains 2 commodities which makes it quite difficult to detect the market condition.
for example if you trade USDJPY you have to know the market condition from USD and JPY. the japanese bank pushes JPY in one direction and USD is in a sideways market means USDJPY will move strongly in one direction. JPY is the boss in this case.
  • #67
  • Oct 12, 2017 4:47pm Oct 12, 2017 4:47pm
Quoting GoldTheHun
{quote} The link you have posted does not return any results. Anyways, what I am trying to say is that there is a strong current against the retail traders. I am not talking about retail traders in retail forex brokers. These forex brokers transactions don't even effect the real interbank currency markets. They act as market makers only. You lose = they win and vice versa. In inter bank markets the orders are always increments of 1 lot. If a broker accepts less than 1 lot, it is a market maker. Which means you lose = they win. Ecn, stp are all gimmicks......
A former manager of mine once told me "don't blame Malicious when you can blame Incompetent".

My idea is simpler: retailers shoot in their own foot. Here you can often read that people want to be right. They want a winrate high above 50%. They quickly pocket 10-20 pips so they win but can't accept being wrong. They let their losing positions grow. They average down because you know price always comes back... So what happens when the price goes up? Bull retailers take profit right now and pocket their few pips. This reduces the overall exposure of the retail market. Bear retailers wait and hope. Some will add to their losers other will try to pick tops (because they are smarter). This reduces the overall exposure of the retail market a bit more. The more the price increases the less the exposure: retail market will turn net short in a up trend. When price eventually reverses they do the opposite. Bears are relieved to exit at breakeven after a 400 pip DD But that's only a floating loss not a real one you know... so they were right. Bears will now pocket their few pips and bulls will let the down trend against them. Retailer exposure now increases.

(in red the retailers long/short ratio at dukascopy)
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Did they learn lately?
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No greed. No fear. Just maths.
  • #68
  • Oct 12, 2017 8:31pm Oct 12, 2017 8:31pm
Quoting RondaRousey
Some good discussion here. Choppiness occurs when it is trying to reach equilibrium. Where is equilibrium?
Interesting thread.

Market is quite volatile - perception, news, sharks...
Trade small frames.!!
See pound today?!? wow.

Chart above - nice little H&S done. Extend neckline and it'll reach yesterday's high.
Big H&S forming now.

GL.

Anyway, bitcoin!!
Another major jump up. Trigger spikes at 5000 barrier. Food for thought

Ronda, don't hide here, tell us over there about you shorting it
Beware of robber banks (RB), bad advisors.
  • #69
  • Oct 13, 2017 1:34am Oct 13, 2017 1:34am
Quoting PipMeUp
{quote} A former manager of mine once told me "don't blame Malicious when you can blame Incompetent". My idea is simpler: retailers shoot in their own foot. Here you can often read that people want to be right. They want a winrate high above 50%. They quickly pocket 10-20 pips so they win but can't accept being wrong. They let their losing positions grow. They average down because you know price always comes back... So what happens when the price goes up? Bull retailers take profit right now and pocket their few pips. This reduces the overall exposure...
Your post says it all, thank you...
  • #70
  • Oct 13, 2017 5:28am Oct 13, 2017 5:28am
Quoting mambomango
{quote} choppiness is the change from one market condition to another.
From entire reply, I agree only with that.
Money moves the market, not an indicator.
  • #71
  • Edited 8:32am Oct 13, 2017 7:56am | Edited 8:32am
Quoting andoseg2
{quote} From entire reply, I agree only with that.
that means there is nothing like a strong USD or a weak EUR and the pairs are independent from each other.
sadly the banks sees currencies in a much different way and we play the game of their algos.
look at the flash craches, they will never happen only on one pair. i.e. a GBP flash crash moves all GBP pairs.
there you can see the real power of the robots and that they trade one commodity. the chart is just the shadow of the reality.
like he said well:
Quoting Nicholishen
{quote} I think calculating choppiness by looking at an individual pair is trying to fit a two-dimensional solution to a three-dimensional problem.
  • #72
  • Oct 13, 2017 11:14am Oct 13, 2017 11:14am
Quoting mambomango
{quote} that means there is nothing like a strong USD or a weak EUR and the pairs are independent from each other. sadly the banks sees currencies in a much different way and we play the game of their algos. look at the flash craches, they will never happen only on one pair. i.e. a GBP flash crash moves all GBP pairs. there you can see the real power of the robots and that they trade one commodity. the chart is just the shadow of the reality. like he said well: {quote}
What's the reason you deal with such theories ? Really. Will they bring ca$h in your pockets ? I don't think so.
Advice : be a retail trader. You can trade for a living and have many millions of $ in bank as a retail trader.
Don't exhaust yourself with complex theories. You try to understand how the wheel was created. Isn't more easy to use the wheel for your needs ?
Money moves the market, not an indicator.
  • #73
  • Oct 13, 2017 11:42am Oct 13, 2017 11:42am
Quoting PipMeUp
{quote} A former manager of mine once told me "don't blame Malicious when you can blame Incompetent". My idea is simpler: retailers shoot in their own foot. Here you can often read that people want to be right. They want a winrate high above 50%. They quickly pocket 10-20 pips so they win but can't accept being wrong. They let their losing positions grow. They average down because you know price always comes back... So what happens when the price goes up? Bull retailers take profit right now and pocket their few pips. This reduces the overall exposure...

Nobody trades the daily chart except.... me ? who else ?

that graph is cherry picked 100%

interesting funny story though
  • #74
  • Oct 13, 2017 11:46am Oct 13, 2017 11:46am
Quoting andoseg2
{quote} What's the reason you deal with such theories ? Really. Will they bring ca$h in your pockets ? I don't think so. Advice : be a retail trader. You can trade for a living and have many millions of $ in bank as a retail trader. Don't exhaust yourself with complex theories. You try to understand how the wheel was created. Isn't more easy to use the wheel for your needs ?
its not just a theorie its the result of my research and i trade this "theorie" very successful and i had never success with the retail theories.
that gives me the confidence to make such claims. if you trade like retailers you lose like them.

but how can you improve the results for every strategy? when you find out the market condition, so a choppiness indicator would be helpful for everyone.
any ideas how?
  • #75
  • Oct 13, 2017 12:36pm Oct 13, 2017 12:36pm
Quoting HeyYou
{quote} Nobody trades the daily chart except.... me ? who else ? that graph is cherry picked 100% interesting funny story though
I only trade daily candles but the entry is on a lower timeframe.
Here's Tom with the weather.
  • #76
  • Oct 13, 2017 12:49pm Oct 13, 2017 12:49pm
Quoting HeyYou
that graph is cherry picked 100%
Absolutely. I cherry picked EUR/USD because it is the most traded pair. I cherry picked daily to have all the year 2017. I cherry picked the last price action because I was unable to cherry pick the future... The TF you trade is irrelevant. The exposure is sampled at 30min resolution.
No greed. No fear. Just maths.
  • #77
  • Edited 1:05pm Oct 13, 2017 12:52pm | Edited 1:05pm
Quoting PipMeUp
{quote} Absolutely. I cherry picked EUR/USD because it is the most traded pair. I cherry picked daily to have all the year 2017. I cherry picked the last price action because I was unable to cherry pick the future... The TF you trade is irrelevant. The exposure is sampled at 30min resolution.
C'mon Pip, those arrows are following the daily trend..

I don't even ask you to post other charts..

anyway.. peace out
  • #78
  • Oct 13, 2017 1:20pm Oct 13, 2017 1:20pm
Quoting OHLC
{quote} My advice is not to listen to anyone's so called theory about how the markets work. As a retail trader you're going to get attacked regardless. You're going to get attacked intellectually, semantically, personally. But, there isn't much there to attack when you know what you're doing (yes, even as a retail trader). {image}

nobody will attack me because I'm peaceful.

first rule in life: don't act as a victim!
  • #79
  • Oct 13, 2017 1:45pm Oct 13, 2017 1:45pm
Quoting HeyYou
{quote} C'mon Pip, those arrows are following the daily trend.. I don't even ask you to post other charts.. anyway.. peace out
I don't get your point. The red "oscillator" is the ratio LONG/(LONG+SHORT). I added the black arrows manually exactly to show what you say: it mirrors the trend. The more the price raises the higher the proportion of short positions and the other way around. I'm simply proposing a plausible explanation to this: people let their losers run and close quickly the profitable trades.
No greed. No fear. Just maths.
  • #80
  • Oct 13, 2017 1:53pm Oct 13, 2017 1:53pm
Quoting PipMeUp
{quote} I don't get your point. The red "oscillator" is the ratio LONG/(LONG+SHORT). I added the black arrows manually exactly to show what you say: it mirrors the trend. The more the price raises the higher the proportion of short positions and the other way around. I'm simply proposing a plausible explanation to this: people let their losers run and close quickly the profitable trades.
wth... I'm among those 2-3 bast**ds who trade the daily and let the losers run.. banked $700 since last november

but I screwed up these days (the damn emotions!!) so I'm up $500
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