What indicators do you look for most?

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Old Apr 8, 2015, 1:47am   #1
Joined Mar 2008
What indicators do you look for most?

I've been in and out of the markets for a number of years since I was in high school. I'm finally at the point in my life where I've got some real cash I can try intelligently investing (not gambling). I've been doing heavy research for some time and two questions keep coming up.

How do you tell what is a swing from a full blown reversal.

What indicators do you rely on for your entry strategy and why? There are a million theories out there but so far they all seem to be a bit wishy washy in the why area?
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Old Apr 8, 2015, 7:49am   #2
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Originally Posted by NH538DB8 View Post
I've been in and out of the markets for a number of years since I was in high school. I'm finally at the point in my life where I've got some real cash I can try intelligently investing (not gambling). I've been doing heavy research for some time and two questions keep coming up.

How do you tell what is a swing from a full blown reversal.

What indicators do you rely on for your entry strategy and why? There are a million theories out there but so far they all seem to be a bit wishy washy in the why area?
a)I do not think you can tell for certainty, but you can follow clues or prints, PA will help you with that by the nature of the moves itself by comparing momentum in swings and by comparing projection and depths of the relative extensions, still there is not guarantee because at any time anyone can dump on you as much to make your reading of technicality just an attempt and nothing more. Still reading properly is a good edge.

b) None.....clearly.

Last edited by Fugazsy; Apr 8, 2015 at 7:58am.
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Old Apr 8, 2015, 8:05am   #3
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I don't think there's an adequate answer. Choice of indicators will vary according to your strategy but they all suffer from lagging data, always behind the price action. That's why they can't predict - only price can tell you which is a swing and which is a reversal, but only after it has happened (and most indicators don't even do that).

So if there are no really good indicators, using a bunch of them will not make them work better. I've got to suggests using as few as possible and keeping charts clean as possible to help quick and objective decisions. I use 3 EMAs to identify my long or short set-up (trend-following): entry is then based on price action patterns (though an entry pattern I sometimes use is based on new close back on the 'right' side of a much shorter-term MA).
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Old Apr 8, 2015, 8:42am   #4
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Hi NH538DB8,
Quote:
Originally Posted by NH538DB8 View Post
. . .How do you tell what is a swing from a full blown reversal.
As with so many questions of this kind, the answer lies with the definition of each individual trader based on their own research. What you term a pull back - I might term a reversal and vice versa. These are all just words which can mean whatever we want them to mean. What matters is that you are able to determine one from the other in a way that makes sense to you, fits with your views and beliefs about the way the markets function and enables you to make trading decisions in a timely and consistent fashion.

For what it's worth, personally, my assumption is that the prevailing trend will continue unless and until there is a clear indication of a reversal. Therefore, all counter-trend moves are merely pull backs in my book until a reversal has taken place. For this to occur, I need to see the following (in an uptrend): a lower swing high followed by a breach of the previous swing low. (Think of the right hand 'shoulder' of a head and shoulders pattern.) When that occurs, the trend has reversed from up to down.

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Originally Posted by NH538DB8 View Post
. . .What indicators do you rely on for your entry strategy and why? There are a million theories out there but so far they all seem to be a bit wishy washy in the why area?
This is a personal choice, obviously. Personally, I'd be wary of using indicators as the primary tool for making entry decisions. I think they can be useful for 'indicating' what price is doing - or might do - which (some traders) can't always see just by looking at price alone. But it is only an indication! So, I suggest you seek confirmation from elsewhere and, if possible, use price action as your means for entering and exiting trades. If you've not seen it already, this Sticky has additional info' on indicators that might be of interest to you: Essentials Of Technical Analysis. If you don't want to read the whole thing, scrol down to this heading: 'Indicators and the Mechanics of TA'.
Tim.
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Old Apr 8, 2015, 6:59pm   #5
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Originally Posted by NH538DB8 View Post
How do you tell what is a swing from a full blown reversal.
I can't possibly add anything helpful to Timsk's answer to this question, just above. I totally endorse both paragraphs of it, which completely encapsulate (but much more neatly and usefully than I'd have managed) the points I wanted to make. It's subjective, but my perspective is apparently exactly the same as Timsk's.

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What indicators do you rely on for your entry strategy and why?
None.

Because over all the years I've been trading, I've gradually and consistently done a little better and been a little more consistent by giving them up, and I now trade more or less without them at all. With some relief and much steadier income.

I find "patterns of bars" - and especially their highs and lows, rather than their closes which are essentially arbitrary - and their relationship and position relative to the lines/areas of support and resistance I've sometimes drawn on my charts, far more productive and insightful, for entries.

In any case, "entries" are a pretty minor issue, in terms of achieving stready profitability with trading. Position-sizing, money-management, exits, stops and their movements, and all the psychological aspects of trading are far more important, in my opinion, than entries. For what it's worth, if anything, it took me many years gradually to learn this, and if someone had said it to me when I started, it probably wouldn't have meant very much to me, but I can't help that.

There's nothing wrong with having a moving average on your charts, to remind you of the recent trend, and nothing wrong with looking at it on a higher/slower periodicity of chart as well, to "see the bigger picture", but even there, the levels of support and resistance are far more significant. To me. I still sometimes have a 20-period or 30-period MA on a chart, while I'm trading. Maybe one day I'll get rid of even that.

"Just my perspective".
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Old Apr 8, 2015, 8:11pm   #6
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Originally Posted by alexaherself View Post
I can't possibly add anything helpful to Timsk's answer to this question, just above. I totally endorse both paragraphs of it, which completely encapsulate (but much more neatly and usefully than I'd have managed) the points I wanted to make. It's subjective, but my perspective is apparently exactly the same as Timsk's.



None.

Because over all the years I've been trading, I've gradually and consistently done a little better and been a little more consistent by giving them up, and I now trade more or less without them at all. With some relief and much steadier income.

I find "patterns of bars" - and especially their highs and lows, rather than their closes which are essentially arbitrary - and their relationship and position relative to the lines/areas of support and resistance I've sometimes drawn on my charts, far more productive and insightful, for entries.

In any case, "entries" are a pretty minor issue, in terms of achieving stready profitability with trading. Position-sizing, money-management, exits, stops and their movements, and all the psychological aspects of trading are far more important, in my opinion, than entries. For what it's worth, if anything, it took me many years gradually to learn this, and if someone had said it to me when I started, it probably wouldn't have meant very much to me, but I can't help that.

There's nothing wrong with having a moving average on your charts, to remind you of the recent trend, and nothing wrong with looking at it on a higher/slower periodicity of chart as well, to "see the bigger picture", but even there, the levels of support and resistance are far more significant. To me. I still sometimes have a 20-period or 30-period MA on a chart, while I'm trading. Maybe one day I'll get rid of even that.

"Just my perspective".

Thanks everyone for your input. After reading my original post I really did a disservice and allowed it to be another generic "how do I do blah" post.

I know there is no magical single or combination of indicators that makes something go up. But there has to be a way to sort through the thousands of equities to find those most closely fitting to your criteria for entry.

Alexa, you mentioned that you trade off the price pattern alone and that is a skill that you've honed over years of trading and watching. With that in mind, are there some basic patterns that you can highlight to research further into?

Timsk, just want you to know that I'm looking through the Trading Plan Template you have in your sig. More structure is never a bad thing.
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Old Apr 8, 2015, 8:19pm   #7
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I like to apply a short term standard deviation using the h/l over the course of a few weeks and apply it as a percentile(lining up the columns so as to effect the ones likely to change) to the average price either up or down and if the h/l is outside of this bracket by an amount greater then I anticipate then I consider that a break out from the pattern either up or down. At that point I consider there will be a reversal towards the other end of the std-D -news not withstanding- or a break to a new range.

I also collect trend data via the h/l over the same time frame and submit to strengthening and weakening trends as a further analysis.
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Old Apr 8, 2015, 8:40pm   #8
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Originally Posted by alexaherself View Post
I can't possibly add anything helpful to Timsk's answer to this question, just above.

.......................................



In any case, "entries" are a pretty minor issue, in terms of achieving stready profitability with trading. Position-sizing, money-management, exits, stops and their movements, and all the psychological aspects of trading are far more important, in my opinion, than entries. For what it's worth, if anything, it took me many years gradually to learn this, and if someone had said it to me when I started, it probably wouldn't have meant very much to me, but I can't help that.



"Just my perspective".

Amazing

It took my a few years to find totally the opposite

Entries are absolute key for me Intraday

Even if I get a direction wrong - I normally can still get out with a profit and maybe even a RR of 1 ;-)

Still we are all different - and as long as we make money - and I don't mean just 50% per annum on retail size accounts - then any way which is consistent with low drawdown etc is still OK

Good Trading


Regards


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