Avoiding consolidation chop

[ezrollin]

Not an NT question.

Does anyone have any advice on how to avoid getting chopped up? thanks

[RT001]

A couple of ideas:

- compare price or moving averages over a certain period
- examine the slope on slow moving averages
- evaluate the number of crossovers in indicators during a period
- get the percentage of the max minus the min of a period and see if that percentage is above a certain threshold

That being said, I am still googling for an answer to this... Good luck!

[Skechers]

A chop usually goes in a range. You can keep track of the high and the low of prices say 5 to 10 bars ago, calculate the difference Highest - Lowest and use a threshold of the result below which you would not trade. Could be a good indicator to code ...

[RT001]

A very simple version also would be to check if the current price is at least near a recent high.

For example in ninjascript, you could check at least if the current price is 2% lower than the previous 200 candles high. Combined with other indicators and good risk management it can filter out a couple of false signals:

(Close[0] > MAX(High, 190)[10] * 0.98)

[RT001]

Not an NT question.

And maybe to be closer to your original question instead of NT coding and indicators, I am at the point where I consider avoiding trading momentum breakouts and crossovers. It leads you to be a little bit more of a bottom buyer, therefore increasing your risk-reward ratio and you can have a more relaxed risk management approach, instead of fearing a massive reversal when you buy at the top. Just some ideas from a friend struggling in the current market haha.

[NinjaTrader_ChelseaB]

Hello ezrollin,

This question appears to be directed to the community for opinions.

However, if you do have any specific questions or have specific logic you are having trouble turning to code, I will be monitoring this thread to provide any insight.

My suggestion would be to define the rules of what is 'chop'.