Sideways Market Channel Detection ?

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  • 11/11/2019 at 3:51 AM #112517 quote
    kenn
    Participant
    New

    Hello,

    I am testing a system working with EMA but it gives a lot of wrong signal on the sideways market.

    I want to draw a channel and stop trading in the channel. I know bollinger bands etc. but they don’t work well with it.

    Could you give me suggestions how to draw a channel working well with EMAs please ?

    Cheers!

    11/11/2019 at 10:22 AM #112520 quote
    robertogozzi
    Moderator
    Master

    There are many (imperfect) ways to detect a sideways market:

    • Bollinger Bands (BB) and Keltner Channel (KC) – since KC has fixed distance bands, while BB doesn’t, when at least one of the BB bands sits within the KC it is considered a sideways market, when the BB bands sits outsite it’s a trending market
    • you can test, when there is an MA crossover that there haven’t been other crossovers within the last N bars, since too frequent crossovers may reveal a sideways market

    there are more (imperfect) ways, of course. You can browse through this forum (or the internet) searching for RANGE or SIDEWAYS or DETECT to find some indicators that may further help you find a solution that suits you best.

    11/11/2019 at 11:33 AM #112523 quote
    Derek
    Participant
    Veteran

    Hello kenn,

    as you know a range is established when a range appears on the chart 🙂

    Technically speaking a range is confirmed if the market is never trading higher than the high nor lower than the low during a specific time frame.

    So maybe an approach like “if there is a crossover but no recent higher high/lower low, then ignore signal” is what you are looking for?

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Sideways Market Channel Detection ?


ProOrder: Automated Strategies & Backtesting

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kenn @kenn Participant
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This topic contains 2 replies,
has 3 voices, and was last updated by Derek
6 years, 3 months ago.

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Forum: ProOrder: Automated Strategies & Backtesting
Language: English
Started: 11/11/2019
Status: Active
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