If you have watched chapter 14 in the Trading Rush Price Action Course, you probably remember the simple but effective technique that you can use to filter the choppy markets. The Trading Rush Choppy Market indicator improves that technique even further.

 

The TR Choppy Market has three main components. When the price movement is good, the Trading Rush Choppy Market will indicate it with light green bars. When the price movement is extremely good, the Trading Rush Choppy Market will indicate it with dark green bars. However, if the price movement is choppy, the green bars will simply disappear.

 

But then there is this line that looks like a moving average because it is and it is showing the average strength of the good price movement. For example, when the price movement is good, and multiple green bars are formed in the Trading Rush Choppy Market Indicator, the average line will move in the upward direction. But when the price is choppy and not worth trading, the green bars will not only disappear, but the average line will start falling towards the zero line.

 

The TR Choppy Market Indicator ranges from zero to a hundred, and the higher the average line is, the better the price movement is. As you can see here, when the price movement is good and not choppy, the average line is staying above 20. And when the price gets choppy, the average line falls towards the zero line, and stays below 20 for the most part.

 

This is the first version of the Trading Rush Choppy Market Indicator, and while testing I have found that 20 is the starting level that differentiates the good vs bad market, and the higher you go, the more choppy market you are going to filter. By default, the Trading Rush Choppy Market will come with a horizontal line that you can adjust. If you noticed that on a particular chart 50 is the level that differentiates the good vs bad market, you can simply move the horizontal line to 50, and with that, you will also adjust the size of the green bars.

 

But now, let’s put the Trading Rush Choppy Market Indicator to the real test, to see if it actually filters the choppy markets.

 

But, we need a trading strategy that gives many entry signals in a short amount of time, and a market that is choppy and trending, so we can see if the win rate increases with the Trading Rush Choppy Market indicator.

 

For the indicator, we simply come to the Trading Rush website, look at the TR Scores of many different strategies that we tested 100 Times, and then select the indicator that gave a bad win rate.

 

Let’s use the CCI indicator that only got a TR Score of 3.5 in the win rate category, and I found AUD JPY, which is trending and is choppy on the 5 mins timeframe.

 

To see if the win rate goes up with the Trading Rush Choppy Market, I took more than 400 trades in total with different settings.

 

When I took 100 trades with the CCI indicator without the TR Choppy Market filter, it got a 29 percent win rate with a 1.5 to 1 reward risk ratio. The win rate is so low because the CCI has a bad win rate in the first place, and on top of that, we are testing it in the choppy market. But when I tested it again with the Trading Rush Choppy Market filter, with the 20 level to differentiate clean vs choppy market, it increased the win rate by 3 percent on the same market structure. And with the 30 level, the win rate was 4 percent higher. And when the 40 level was used to differentiate good vs bad market, the win rate was 12 percent higher, but I ran out of data and was only able to take around 80 trades. Adding around 20 more trades shouldn’t make a big difference to the win rate, because others had pretty similar win rates at the 78th mark as they did at 100.

 

In other words, the win rate significantly improved with Trading Rush Choppy Market Indicator, and it got better with higher filtering levels.

 

If we compare charts side by side, you can see that on this chart, the price got choppy in an uptrend. The CCI indicator on its own gave 8 false entry signals. But with the Trading Rush Choppy Market filter, 6 out of 8 signals disappeared. Here, CCI on its own gave 8 signals in the choppy market, but with the TR Choppy Market filter, only 2 remained. On this chart, the CCI indicator gave 10 bad signals, but with the Trading Rush Choppy Market Indicator, 60 percent of the bad trades were filtered.

 

Does this mean the third Trading Rush indicator we created is successfully filtering the choppy and bad markets? According to the data, it definitely is, and you can try it yourself because it is absolutely FREE just like all the indicators we have created so far! I will share the source code in a public Patreon Post with the installation steps! LINK is in the description! Also, support Trading Rush on Patreon and get to see In-Depth Trade Analysis and Trade Opportunity Signals. Thanks for watching!