How to trade

In terms of trading signal, the buy order or buy pending order can be opened when the price breakout the top of the Sideways Box and sell order or sell pending order can be opened  when the price breakout the bottom of the detected Sideways Box.  Normally pending order is good for this purpose and therefore the Sideways Market trading strategy is even suitable for the part time traders too. To prevent opening position with false breakout, it is normally good to add some buffers (i.e. this is the function of the Box Buffer pips parameter) on top and below of the Sideways Box. For example, when you open the buy positions,  wait until the price breakout few pips above the top of the box. Like wise, when you open the sell position,  wait until the price breakout few pips below bottom of the box. Your stop loss is always bottom of the Sideways Box for buy and top of the Sideways Box for sell. The Sideways Market Analyzer provides you with built in backtesting function to determine the best trading parameters instantaneously. Finding the best trading parameters set normally takes less than 5 minutes for one chart. 

 

How to get even more profits using Sideways Market Statistical Analyzer

Note that Sideways Market Statistical Analzyer is a compete trading system. With its own, you can start to trade without any second information. However, when you combine this Sideways Market Statistical Analyzer with other trading system, you will soon notice that your profit can be doubled up. Detecting Sideways Market is beneficial for all kind of different trading strategies. In order to take advantage of the detected Sideways Market, you should remember some simple principle below:

 

• Firstly, always remember that Sideways Market is a resetting period for the financial market. If new trend is born then they will born after the Sideways Market and if old trend is continue then they will continue after the Sideways Market. This is great time for you to refresh your trading strategy and to update the fresh market view.

 

• Secondly, the Sideways Market is often the representation of accumulation period of large transactions from big guys. Therefore, the top and bottom level of the detected Sideways Market can act as a very important support and resistance level even after the price move outside the box. Sometimes this can be non breakable support and resistance level. Therefore, you can set your stop loss around the detected Sideways Box.

 

• Finally, when you combine with other trading system, I recommend switching off the backtesting mode (UseBacktest = false). Note that backtesting is purely done on the assumption you will trade when the price break above or below the Sideways Box. This is great for you if you don’t look at anything else. However, the next Sideways Box will be detected only after all the maximum number of virtual order transactions are completed for that detected Sideways Box (You will see small order arrow and stop loss and take profits labels on your charts for this.). If UseBacktest = false, then the Sideways Market Statistical Analyzer will update as soon as new Sideways Box is detected. Here is few steps  you can follow prior to combine other trading system with Sideways Market trading strategy:

 

1. Attach Sideways Market Statistical Analyzer on your chart with default setting (You may change BarsToScan to 4500 if your PC is quite speedy.)
2. Find the best parameter set for the time frame and for the currency symbol (of course, here UseBacktest = true)
3. Click “Save Parameter” button (For extra safety, you might record these best parameter set in your Excel Spreadsheet for backup.)
4. Switch off backtesting (UseBacktest = false, you will see there are more Sideways Boxes are detected on your chart.)
5. Attach your indicators or trading system you want to combine with the Sideways Market Statistical Analyzer.

 

Sideways Market Statistical Analyzer is perfectly compatible with Harmonic Pattern Plus and Price Breakout Pattern Scanner

Detection of Sideways Market is a kind of pattern and geometric trading in the broad sense. Just like Harmonic Pattern Plus and Breakout patterns Scanner can be combined together for superb results. Sideways Market Statistical Analyzer can be combined with any of these two tools. Even user can combine all the three tools together. As I mentioned before, Sideways Market is the resetting period for the financial market.  I found that Sideways Market often detected at the same time as big harmonic patterns and breakout patterns. Here is how to combine these systems together.

 

• In the Harmonic Pattern case, the bullish and bearish harmonic pattern might be effective and tradable as soon as the harmonic pattern is formed. But they might effective after certain period of Sideways Movement. For example, screen shot below shows how many Sideways Box appear after the bullish AB=CD pattern is formed.

• Also as I mentioned before, the top and bottom of Sideways Box tend to act as a strong support and resistance level. Therefore, unless you have a good reason (i.e. other patterns, etc) to hold the position, it might be good to plan your take profit around the top and bottom of Sideways Box.

• However there are some cases that some strong patterns can penetrate the Sideways Box with several attempts. In such a case, other strong sign of trend direction must be shown like large pattern formation in higher time frame or some release of strong data, etc. If you find the signs, then you might plan to hold the position until next Sideways Box is detected. In this case, you might take extra risk of holding positions for longer period of time. However, your reward, Take Profit Level,  is quite often over the 161.8% Fibonacci retracement level. Therefore, it is worth to take such a holding risk for such a high rewards.   

• In addition, you might like the multiple position strategy than a single position strategy using top and bottom of the Sideways Box as the multiple take profit levels. You can certainly back step through each patterns of harmonic patterns and Sideways Boxes if you idea is working on historical prices. The Harmonic Pattern Plus and the Sideways Market Statistical Analyzer provide all the necessary function for you to develop your own unique trading strategies.

 

• With the Price Breakout Pattern scanner, you can combine the Sideways Market Analyzer together too. When the top line of falling wedge pattern intersect with the bottom of the Sideways Box, the support at the bottom of Sideways Box tend to be very strong. As you can see from pics below. When the top line of falling wedge pattern intersect with bottom line of the Sideways Box, the support at the bottom line of the Sideways Box become very strong predicting the rise of price in next candle bar. The same is true when the bottom line of rising wedge is intersect with top of the Sideways Box. In this case, the top of Sideways Box act as a very strong resistance level predicting the fall of the price in the next candle bar.

 

 

• In addition, if double top and triple top lines are very near to top of the Sideways Box, they tend to become very strong resistance predicting fall of price. Like wise, if the double bottom and triple bottom lines are very near the bottom of the Sideways Box, they tend to become very strong support level predicting rise of price. As you saw, the breakout patterns (falling wedge, rising wedge, double top, double bottom, triple top and triple bottom) associated with the Sideways Movement have even stronger prediction power than the breakout pattern alone.