Confirmation Signals

This is a discussion on Confirmation Signals within the First Steps forums, part of the Reception category; Trying to slowly get to grips with charting and the indicators contained within. How does one decide if an indicator ...

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Old Feb 24, 2004, 4:49pm   #1
Joined Jan 2004
Confirmation Signals

Trying to slowly get to grips with charting and the indicators contained within.

How does one decide if an indicator is really an indicator or a false one. For instance a break out or the price crossing it's moving average.

At what point higher (or lower) than the price could you say that the signal is true.

I realise this the answer to this question might relate to trading times and personal choice, though I would like to be pointed in the correct direction and have some food for thought.
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Old Feb 24, 2004, 4:58pm   #2
 
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This is the problem. If you load up with indicators, you will never trade waiting for them to all agree. If it's a long term trend you might be OK but most of the time you'll miss the boat.
Indicators lag.
You must select what you are comfortable with. You are the one who pulls the trigger. It's your £$£$££. It's your decision.
It's all about building confidence. There's no magic formula.
Keep asking though, you seem very busy and dedicated. That will get you there!
Good luck
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Old Feb 24, 2004, 5:17pm   #3
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hagadol

Have you been on or thought about going on an appropriate course?

I have also been through the mill of reading books and visiting web sites. Whilst I now understand a lot more about investing and speculating I have come to the conclusion that in order to apply the techniques I require some personal tuition which I intend to pursue in the springtime.

I also find that it is difficult to follow some of the threads on this site because of jargon and a lack of my in-depth knowledge which I think a course could provide.

Regards

bracke
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Old Feb 24, 2004, 5:29pm   #4
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hagadol & bracke, there is no substitute for putting in the hours, reading up on TA, charts, indicators etc. If you're a true trader, it'll be a labour of love anyway and you wont find it an effort.

There are certainly enough people offering courses on trading, but my money would go to those who offer courses on TA and charting rather than selling specific systems.

What you may find as you trawl these forums is that the more experienced traders tend to use fewer and fewer indicators. Some relying purely on price action alone.

As a starter, I'd suggest just picking an indicator for volatility, one for momentum and look at the volume and price action.

But as I said up front, I don't think there is any shortcut to this. Without wishing to get too Zen-like, I believe you need to load up with all this good stuff (thousands of hours of it) before you know what to let it go.
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Old Feb 24, 2004, 6:12pm   #5
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TheBramble

I accept the point about reading books and charts but in my own case I think that I have got to the point that I need a one 2 one with the right person

I agree about avoiding buying systems of the shelf. I shall be looking for a TA based course by an experienced trader - there are 2 or 3 who fit the bill and contribute to this site.

If hagadol is anything like me he/she may have reached the situation of being unable to see the wood for the trees in terms of indicators.

I have come to the conclusion that the fewer the indicators the better and that price action seems to me the best route.
I need guidance in this area hence the intention to get one 2 one assistance

Regards

bracke
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Old Feb 24, 2004, 7:56pm   #6
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Quote:
Originally posted by bracke

If hagadol is anything like me he/she may have reached the situation of being unable to see the wood for the trees in terms of indicators.


Please! Indicators shmindicators! They are all a waste of time!

Spend your time learning about price action, forget the indicators and you'll find things improve.


RR
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Old Feb 24, 2004, 8:08pm   #7
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Quote:
Originally posted by rossored



Please! Indicators shmindicators! They are all a waste of time!

Spend your time learning about price action, forget the indicators and you'll find things improve.


RR
Amen!
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Old Feb 24, 2004, 9:40pm   #8
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Top of this page, six red buttons. One is marked "Discussion". If you go to that one, you'll find another one a bit further down marked "Search for a post". Stick "price action" in there and see what happens. It might take a bit of reading but them's the breaks.

Basically, it involves sitting down, looking at charts, and seeing how prices respond at S&R, how price action works over a x/period timescale, etc on your particular instrument/s

Sorry if this comes across as a bit blunt, bit its no more blunt than your own post.
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Old Feb 24, 2004, 9:50pm   #9
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Okay, had second thoughts. Maybe that was a bit too blunt. My apologies (too much red wine at trading time)

Try this instead.

http://www.enthios.com/PrimerBuffypriceaction.htm
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Old Feb 24, 2004, 11:34pm   #10
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hagadol started this thread Thanks for the posts guys.

Feel I am heading in the right direction.

Is there a link between indicators and beer ? Or should I stay away from that direction ?
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