I just want to ask if you have seen this pattern. Mid 2008 was considered a global crises and panic where banks in US and the world stock market crash. Upon studying from the charts how things unfold I notice that During normal period the markets where uncorrelated in their behavior, but when a crises affected the world and every market, every market was trending sharply in one direction, the difference between markets are only magnitude and direction but it was moving somewhere. The same thing happen with the Euro, in the beginning of 2010 every Euro pair was trending sharply in one direction, well before the news came out I believe.
Therefore, do you think a move that is caused by either a world or country crises can be predicted very early on in the initial stage of the trend if associated markets move sharply? If so a system designed for a crash or a trend can be smartly placed at the right time to avoid crazy whipsaws.
Re: Prediction issue
In hindsight -from past market behavior- I am able to see what you are describing. I agree, it is imperative to be able to trade according to the market; trending and non-trending.
The correlation in a crisis can vary. For example in Mid 2008 the USD and JPY were the only two pairs that appreciated. This was new behavior for the JPY to appreciate and become a flight to safety.
During the next crisis (and there will be a next) that last correlation may not exist. Maybe gold will not be viewed as a safe haven. We just don’t know.
Since the conquer builds into these occurances during all market crisis it has you on the right side of the market on all pairs -which are correlated, for example all Yen pairs are trending together- and building into winning positions on big moves. The performance is remarkable.
The question remains, how do you know when you are in a trending market and not.
The conquer trading system is setup to take small frequent losses in periods where the market are contracting. This provides for a manageable draw down of less than 9% which because of the system internals (risk/reward ratio’s and position sizing) the system is able to return to profit within just a couple of 8 hour signal periods. If there were a way to know when the choppy period was going to be so that the system could be adjusted for trending and non-trending periods is the holy grail.
The ATR’s when over a certain price should do exactly that. What is the correct price. For the EUR/USD perhaps over 170. For the GBP/JPY 200 pips.
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