Looking for Advice

[mleung1]

Hi,

I have a formula that is doing fine in a sideway market. But it has trouble once the market becomes trendy, it don't stop out until very late. I have tried to use the signal line of DMI (say, >30) to stop out the trade, but the result is mixed. Any suggestion will be greatly appreciated.

Many thanks,
mleung

[z11]

love to help but your description is too vague ... without knowing what you use as indicators in your current system, there would simply too many possibilities to try. You could describe a bit about your formula without posting any code and someone might be able to suggest a possible solution.

ziggy

[mbuta]

Try detecting the trend with ADX, in which case you switch the stop level based on a Channel of Highs and Lows [sma(3-6) of h() and l(), offset by 1-4]. Choose the one that fits best your needs.

Good Luck!

[mleung1]

Thx for the suggestion, guys.

The system I am working on is quiet simple. It bases on stocastic as an oscillator and sell over bought and buy over sold.

I did try to use the ADX to stop out when it gets >30. Result is mixed. I will try use a hi/lo channel as suggested to stop out rather than the cruel way I am using at the moment. But the problem with ADX is generally not very responsive, in particularlly in a OB or OS conditions. It takes a while for the trend to establish and by then the lose is probably very big.

May try to use a Dochian channel of a longer period than my oscillator as a stop signal.

[rogerha]

Hi,

I use ADX to detect an upcoming trend, ie. if the ADX is rising, then obvisouly we are trending.

However I can see your point about your Stop.

Have you considered a Parabolic SAR ? It won;t be so useful on a sideways market, but might give you an edge in a trendy one ?

Just a thought.

[mbuta]

You are correct, ADx is not very responsive, but I did not suggest to use it for stop, only to detect you are in trend.

The stop should be your channel.
I do not like Parabolic SAR.

Good Luck!