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Rick Roegner wrote:
>
> The sky IS blue.
>
> But I've seen problems with the transition from sideways to trending
> patterns. The issue I have is the inefficiency of a trading system during
> this transition; as with the S&P from '94 into '95.
>
> For instance, to keep it simple, Bollinger bands might work well in a
> sideways pattern, while a moving average might work OK in an uptrend. It
> is the transition which causes problems.
>
> I've tried using volume indicators to determine this transition, but they
> also seem to lag. Also other indicators which are supposed to determine
> trend. The problem being that a trend is not a trend until a certain
> amount of time has passed, meanwhile your system is on an OUT and still
> following the previous pattern as with the S&P into '95.
I would think that your "sideways market" system would stop taking
trades when the mode of the market starts the transition towards the
"trending system". IOW You would be out of the market after the sideways
market stopped taking trades in '94 until the trend system kicked in
starting in '95. Maybe they would overlap for a short period or there
would be short break in trading when the market action is very hard to
determine. It all depends on your system. I have found adx works the
best for indicating trend but this certainly may not be true for someone
else, especially considering the make-up of another's system. IMHO
At least we can all agree on the sky! LOL
Regards... John
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