ES auto-trading with sideways market

[andreid]

I am finalizing an automated trading system for a simple 10-15 EMA on a 3" ES chart.

Up to now, I have relied on a 60" 10-20 SMA to give me the trend and when to expect a sideways market (see chart).
It wouldn't be that difficult to codify it.

It would be interesting to know what others are using to determine a non-trending market.

Thanks in advance.

Andrei

[Guest]

Andrei,

I am still working on this, but typically, I look for fairly quick rate of changes, or indicator extremes. A non trending market will eat you up. Be careful with a moving average, typically, it will get you in at the end of the trend on the small moves, which pretty much eats up all your profits from the long moves. When I figure it out, I will let you know

Regards,

[arbifox]

try this . . .

I am planning on putting this up in my file share as soon as I can truly document it all, but I can give you a brief idea here what works for me.

I do not really like MA of any type unless you have really wide stops, and that is something that I found never works for me. Trending, trading, no matter what, I try to use indicators that can help identify the state of the market as oversold or overbought. The best I have found for this is the combination between stochastics, MACD, and Bollinger Bands. I have been observing the behavior of this for just under a year and a half, so by all means, it is not an easy process to get a set rules that work.

I can tell you this, I developed three programs to date. The first used an hour bar, the second a three minute bar, and the last a minute bar. As I decreased the time of the bar, the results got better. The tighter I made my stops, the better I did. But my performance did not dramatically improve until I started to get out of some trades proactively without waiting for a stop to get hit.

In answer to trading in a flat market, I have never found the market intra-day to be truly flat. There are moments of inactivity, but nothing where I would say it is dead water. And if it is, I use certain criteria I have developed to show it is not really moving, and I look to get out of trades proactively in such times as opposed to waiting around to get my stop hit.

Hope that helps a little . . .