adaptable strategies for all market conditions (choppy and trending market conditions)

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hello dear traders

if someone have any adaptable strategy or idea about a unique strategy that unlike %99 strategies out there can make consistent money in every market conditions (choppy and trending market) welcomes here.

 
Hi, use two different strategies, one for choppy market, second for trending market. Regards Greg
 
Seyedmajid Masharian:

hello dear traders

if someone have any adaptable strategy or idea about a unique strategy that unlike %99 strategies out there can make consistent money in every market conditions (choppy and trending market) welcomes here.

It might be very difficult to design one strategy that fits all market conditions. The best option seems using different strategies either built into one EA or into different independent EAs. The second option seem the easiest.

 
Greg Pawlak:
Hi, use two different strategies, one for choppy market, second for trending market. Regards Greg
the problem is we dont know when market will enter to choppy condition and when market will enter to trending condition.
 
that is why you need to create strategy directly for market condition, for example strategy with  limit order for choppy market, stop order for trending and so on,  backtest it and draw conclusions. Regards Greg
 
Greg Pawlak:
that is why you need to create strategy directly for market condition, for example strategy with  limit order for choppy market, stop order for trending and so on,  backtest it and draw conclusions. Regards Greg
please send an example
 

This is a million dollar question that I have not yet been able to answer. Very interesting question, but we don't know if there is a solution or not. So it comes down to making a prediction for yourself, and maybe an indicator or a model might help, also different assets might behave differently, so choosing one that suits you or that seems to be doing what you want at the moment may be an option.

The problem then is that the condition can change without warning as I am sure you know.


So the problem is to find a logically consistent solution if possible. The logic needs to buy low and sell high if you choose to trade range and if the trade is at a drawdown then no need to react. If the condition is a trend then just need to jump on at any point to follow the trend. But reversals may be a problem and whether or not to react.

This has been my problem basically. And spikes can occur too out of nowhere which can be a problem for probably mostly any system I think.

What I have tried in past was envelopes and try to gauge high and low and use trailing stop. This did not actually work too well.

I also tried Bollinger band buy lower band and sell on higher band. Also did not work well. Infact with EA's not even one of my strategies worked. Martingale also leads to problems. Perhaps there are some systems or EA's in codebase to try, but hard to trust them.


So also tried MA2 shift 10 and linear regression line 12. Buy when Lin reg line above MA2 shift 10 and price has pulled back lower. This is kind of like 'value' and trying to trade in direction of trend. It tries to be logically consistent. But if it is a reversal it will fail. I used TP but no SL, and trailing TP when losing, unless Linear regression line crosses below MA2shift10 line then close (write off trade). I built this into an EA which did well on control points  but not on tick data. 


I then started to trade manually just using the Linear regression 12 line and basically if price is crawling on the line then it is a trend trade in that direction. The results are like a few small profits and then a loss big enough to eliminate profits earned. This is with TP placed where the prediction is for the price to move to and no SL. What can happen is the price can run away in the wrong direction eventually.

So now I started to use this same way of thinking but I use an SL equal size to my TP. Then if my SL gets hit I must reevaluate the situation. It could be that I still believe in original direction and trade the same direction again or that it seems like the situation has changed and I need a trade in a different direction or to otherwise wait for a different more predictable condition. I will see how it goes..


So the conclusion is that the profits should then come from being able to judge with accuracy. Without accuracy there is not a way to win or recover as far as Im aware . You always making a prediction the moment you take a trade. So I am just thinking that it may be sometimes necessary to stop and reevaluate that condition.


Also I am trying to look at a new model where you use Bollinger band 5 standard deviation 2 and linear regression line 12. When the linear regression line 12 touches the upper band (30 min chart eurusd)then it is signaling a reversal downwards is due. And vice versa


Also , you can choose to on Wednesday only trade close to midnight on gmt +2 so that you can get the 3 day swap. This will give you a positive sum game ( like how a broker or a casino operates).

Another thing is that you could trade stocks which are fundamentally stable eg. Microsoft, Coca-cola, CME Group, Berkshire Hathaway. These companies should uptrend, so a pull back to a lower Bollinger band on a daily chart with no stop loss and no leverage might work.


I will try to think of more ideas or give up if it is not possible to win. We will see

 
Bolinger Bands is good example for limit order in choppy market but sometimes limit order will not work on specific currency pair, that is one reason why your strategy could not be profitable. Regards Greg
 
Greg Pawlak:
Bolinger Bands is good example for limit order in choppy market but sometimes limit order will not work on specific currency pair, that is one reason why your strategy could not be profitable. Regards Greg

no matter if we use market execution stop order or limit order the problem is we must make a strategy that can make money no matter how market act. but making money in long term is important not making money in short term .

soso it should pass at least 15 years of backtest firstly.


i have testet 1000s of strategies EAs and indicators in my 12 years of trading with all of them our winning rate chance is still 50:50.

so pure price action and also any indicator or EA cannot halp us and will be equal to flip a coin or randomly insert a trade with closed eyes until the time we found a fast adaptable strategies . because some of them  out there ar just for choppy market and the remaining ones are for trending markets. and instantly after market change its condition they start to lose.

for example when our strategy is for choppy market when market changes to trending market we dont loss or even make money from trend too .and vice versa , so we need a 2 dimention strategy.

 
Brian Rumbles:

This is a million dollar question that I have not yet been able to answer. Very interesting question, but we don't know if there is a solution or not. So it comes down to making a prediction for yourself, and maybe an indicator or a model might help, also different assets might behave differently, so choosing one that suits you or that seems to be doing what you want at the moment may be an option.

The problem then is that the condition can change without warning as I am sure you know.


So the problem is to find a logically consistent solution if possible. The logic needs to buy low and sell high if you choose to trade range and if the trade is at a drawdown then no need to react. If the condition is a trend then just need to jump on at any point to follow the trend. But reversals may be a problem and whether or not to react.

This has been my problem basically. And spikes can occur too out of nowhere which can be a problem for probably mostly any system I think.

What I have tried in past was envelopes and try to gauge high and low and use trailing stop. This did not actually work too well.

I also tried Bollinger band buy lower band and sell on higher band. Also did not work well. Infact with EA's not even one of my strategies worked. Martingale also leads to problems. Perhaps there are some systems or EA's in codebase to try, but hard to trust them.


So also tried MA2 shift 10 and linear regression line 12. Buy when Lin reg line above MA2 shift 10 and price has pulled back lower. This is kind of like 'value' and trying to trade in direction of trend. It tries to be logically consistent. But if it is a reversal it will fail. I used TP but no SL, and trailing TP when losing, unless Linear regression line crosses below MA2shift10 line then close (write off trade). I built this into an EA which did well on control points  but not on tick data. 


I then started to trade manually just using the Linear regression 12 line and basically if price is crawling on the line then it is a trend trade in that direction. The results are like a few small profits and then a loss big enough to eliminate profits earned. This is with TP placed where the prediction is for the price to move to and no SL. What can happen is the price can run away in the wrong direction eventually.

So now I started to use this same way of thinking but I use an SL equal size to my TP. Then if my SL gets hit I must reevaluate the situation. It could be that I still believe in original direction and trade the same direction again or that it seems like the situation has changed and I need a trade in a different direction or to otherwise wait for a different more predictable condition. I will see how it goes..


So the conclusion is that the profits should then come from being able to judge with accuracy. Without accuracy there is not a way to win or recover as far as Im aware . You always making a prediction the moment you take a trade. So I am just thinking that it may be sometimes necessary to stop and reevaluate that condition.


Also I am trying to look at a new model where you use Bollinger band 5 standard deviation 2 and linear regression line 12. When the linear regression line 12 touches the upper band (30 min chart eurusd)then it is signaling a reversal downwards is due. And vice versa


Also , you can choose to on Wednesday only trade close to midnight on gmt +2 so that you can get the 3 day swap. This will give you a positive sum game ( like how a broker or a casino operates).

Another thing is that you could trade stocks which are fundamentally stable eg. Microsoft, Coca-cola, CME Group, Berkshire Hathaway. These companies should uptrend, so a pull back to a lower Bollinger band on a daily chart with no stop loss and no leverage might work.


I will try to think of more ideas or give up if it is not possible to win. We will see

i think if we use a hedging strategy is better than using stop loss and take profit , but that needs a smart way to build that.
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