Filtering Out Choppiness

[chris2980 10]

I have been trying to figure out a way to filter out stocks that are choppy vs stocks that arent. The best way to describe this is by an example.

 

I want to be able to see stocks that are trading like this:

 

http://i.imgur.com/D1cOu.jpg

 

versus more choppy stocks like this:

 

http://i.imgur.com/vgQNN.jpg

 

These are cvlt on 9/27 and chk on 9/28 on the 5 minute time frame. Both of these stocks formed inside bars on the 15 minute chart, but obviously one stocks looks better than the other. Is there a volatility indicator/PCF or something else anyone can think of to filter out these types of choppy charts on the 5 minute time frame?

 

I tried filtering using adx but it doesnt seem to help. I have use a shorter time frame to filter out the choppiness but seems to filter out a lot of winners too. Any advise would be appreciated.

[Obsidian 10]

maybe ATR would help you

[Tams 20]

  chris2980 said:

I have been trying to figure out a way to filter out stocks that are choppy vs stocks that arent. The best way to describe this is by an example.

 

I want to be able to see stocks that are trading like this:

 

http://i.imgur.com/D1cOu.jpg

 

versus more choppy stocks like this:

 

http://i.imgur.com/vgQNN.jpg

 

These are cvlt on 9/27 and chk on 9/28 on the 5 minute time frame. Both of these stocks formed inside bars on the 15 minute chart, but obviously one stocks looks better than the other. Is there a volatility indicator/PCF or something else anyone can think of to filter out these types of choppy charts on the 5 minute time frame?

 

I tried filtering using adx but it doesnt seem to help. I have use a shorter time frame to filter out the choppiness but seems to filter out a lot of winners too. Any advise would be appreciated.

 

put on a macd .

[DbPhoenix 42]

  chris2980 said:

I have been trying to figure out a way to filter out stocks that are choppy vs stocks that arent. The best way to describe this is by an example.

 

I want to be able to see stocks that are trading like this:

 

http://i.imgur.com/D1cOu.jpg

 

versus more choppy stocks like this:

 

http://i.imgur.com/vgQNN.jpg

 

These are cvlt on 9/27 and chk on 9/28 on the 5 minute time frame. Both of these stocks formed inside bars on the 15 minute chart, but obviously one stocks looks better than the other. Is there a volatility indicator/PCF or something else anyone can think of to filter out these types of choppy charts on the 5 minute time frame?

 

I tried filtering using adx but it doesnt seem to help. I have use a shorter time frame to filter out the choppiness but seems to filter out a lot of winners too. Any advise would be appreciated.

 

Back when I was into indicators, I tried all sorts of things to address this issue, but nothing was satisfactory. The end solution was to limit my universe to, say, 100 stocks and flip thru them nightly one by one. If you have a tested setup that you like and rely on, you can flip thru 100 charts in five minutes.

 

Db

[steve46 12]

One thing that may help you is to develop an understanding of the context in which stocks display choppy price action....part of it is due to a stock hitting a specific price or range of prices, and some is due to the attention that stock is getting from professional interests..sometimes that choppy action is a sign that institutions (of all kinds) are adjusting inventory or trying to develop a position, and sometimes one group of participants are trying to take profit while others (usually late to the party) are trying to get in...

 

Whether you pursue that or not is up to you of course, but it could help you....for example

those who see specific issues hitting prices that generate that kind of action, often try to pre-position themselves so that they aren't exposed to that problem

 

Another way to manage issues that display that action is to operate within a longer time frame chart....I work in futures markets and one of the ways I limit chop is to prepare using daily through 30 min charts and to enter on the 10 min or 3 min....of those two the 10 is less choppy and often it allows me to obtain more favorable (earlier) entry.

 

Hope this helps

[ARTjoMS 10]

Maybe try to put on heiken ashi and use your visual judgement?

 

Or maybe you can abuse zig-zag somehow...

 

...just an idea.

[Green Candle 10]

For me nothing is better than an eye. Also moving average helps, like 8MA

[futrstrdr 10]

I have found that a 10 bar dmi works pretty well to tell if a market is choppy. Just watch the movements of the dmi + and dmi- with respect to each other and watch the market at the same time and you'll get a feel for when the market is choppy or not. I use it on the futures markets and on tick charts, but it should work for other time frames and markets