Indicators or Price action

This is a discussion on Indicators or Price action within the Technical Analysis forums, part of the Methods category; To use or no to use......... On the one hand I have a method that uses indicators which albeit are ...

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Old Jun 28, 2006, 8:16pm   #1
 
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Indicators or Price action

To use or no to use.........

On the one hand I have a method that uses indicators which albeit are lagging, produce more winners than losers and with tightish stops, more points won than lost, which, with correct money management, produces a profit.

On the other, price action is what all the threads lead to and many veteran posters profess as the only way...

Then on one thread someones consistently profitable using MA's and CCI and VWAP and I've seen it here and there saying some pro's have RSI, stochs and MA's on board and even on Bloomberg and many other 'pro' sites state certain MA's as relevant.

For a newbie learner, I am torn between making a profit although smaller than could be (lagging indicator) and using none at all and generally getting it wrong far more than I do with indicators.

Just because indicators can be lagging (sometimes they can be spot on), if making a profit with them, why shouldn't they be used. I know its all down to personal preferance but there is so much talk of price action being the 'right' way, Id be interested in others views.
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Old Jun 28, 2006, 8:43pm   #2
 
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Quote:
Originally Posted by wasp
To use or no to use.........

On the one hand I have a method that uses indicators which albeit are lagging, produce more winners than losers and with tightish stops, more points won than lost, which, with correct money management, produces a profit.

On the other, price action is what all the threads lead to and many veteran posters profess as the only way...

Then on one thread someones consistently profitable using MA's and CCI and VWAP and I've seen it here and there saying some pro's have RSI, stochs and MA's on board and even on Bloomberg and many other 'pro' sites state certain MA's as relevant.

For a newbie learner, I am torn between making a profit although smaller than could be (lagging indicator) and using none at all and generally getting it wrong far more than I do with indicators.

Just because indicators can be lagging (sometimes they can be spot on), if making a profit with them, why shouldn't they be used. I know its all down to personal preferance but there is so much talk of price action being the 'right' way, Id be interested in others views.
Hello there Wealthy Anglo-Saxon Protestant or member of the Aculeate family! I don't mind which.

As my uncle Harry used to say "The world is your sewer or your oyster. Just depends how you look at it."

The thing about indicators is that they nearly always work in retrospect and it's easy to find any combo to fit any trade if you try hard enough. Not to say they don't work but if you really really think about it, wouldn't you think it a bit odd if making oodles of dough was as easy as a few bits of spaghetti crossing over each other. If everybody found out then we'd all be rich - hang on there would be nobody to trade with cos we'd all be using the same combo of magic indicators.

So. Don't be torn. Be smart! Don't listen to what anybody else is saying (that includes me BTW) and find out for yourself what works and what doesn't work for you - the unique combination of DNA and electrons that you are.

If you're still stuck then take a leaf out of WS' book. Don't look at the charts - look a bit closer to home.
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Old Jun 28, 2006, 8:47pm   #3
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i personally use nothing other than price these day, As most on here when first setting out you try every indicator going, In my opinion you have to use what feels right for you, If you are consistently making a profit, and maybe a living trading, with or without indicators then you are clearly doing nothing wrong. also as time goes by you will slowly develop your own method of trading, are alter the way you trade, do what you feel happy with, not what others are doing, and remember you dont have to win every race to be world champion, just be consistent.

Regards Mark
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Old Jun 28, 2006, 8:48pm   #4
 
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There is no 'Right way' tho some will try to impress this on you, looks like you already understand this

why should someone else no how you should trade....better than you

Jay
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Old Jun 28, 2006, 8:52pm   #5
 
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wasp started this thread I assume your goal is to make a consistent profit/possible income from trading.

If you are/can do so with indicators (or price or seasons, moon cycles, rainfall, sounds or any other of a wonderful array) then just keep doing so. As others have already said, there is no right or wrong way, its what fits you and if your making a profit, keep doing so.
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Old Jun 28, 2006, 9:21pm   #6
 
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Originally Posted by chrisw
I assume your goal is to make a consistent profit/possible income from trading.

If you are/can do so with indicators (or price or seasons, moon cycles, rainfall, sounds or any other of a wonderful array) then just keep doing so. As others have already said, there is no right or wrong way, its what fits you and if your making a profit, keep doing so.
Yeah but , no but, he wouldn't be asking if he were makin' a profit?

What's your magic formula BTW
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Old Jun 28, 2006, 9:25pm   #7
 
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wasp started this thread
Quote:
Originally Posted by rols
Yeah but , no but, he wouldn't be asking if he were makin' a profit?

What's your magic formula BTW
Now that would be telling wouldn't it be rols... You tell me yours and I'll tell you mine!

I think he was asking whether to look to price action as although he was/is making a profit, could he make better with price action rather than indicators.
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Old Jun 28, 2006, 9:55pm   #8
 
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Day and night, summer and winter

Quote:
Originally Posted by wasp
To use or no to use.........

On the one hand I have a method that uses indicators which albeit are lagging, produce more winners than losers and with tightish stops, more points won than lost, which, with correct money management, produces a profit.

On the other, price action is what all the threads lead to and many veteran posters profess as the only way...

Then on one thread someones consistently profitable using MA's and CCI and VWAP and I've seen it here and there saying some pro's have RSI, stochs and MA's on board and even on Bloomberg and many other 'pro' sites state certain MA's as relevant.

For a newbie learner, I am torn between making a profit although smaller than could be (lagging indicator) and using none at all and generally getting it wrong far more than I do with indicators.

Just because indicators can be lagging (sometimes they can be spot on), if making a profit with them, why shouldn't they be used. I know its all down to personal preferance but there is so much talk of price action being the 'right' way, Id be interested in others views.
Wasp

Indicators will work some of the time. With any indicator it is necessary to apply it to the right conditions and for the right purpose - some at designed for trend-following, some for reversals, some for momentum and so forth. Indicators are one level removed from price and , so suffer some "degradation" as a result, although they may be more convenient and quick to use.

Price action on its own and indicators on their own work some of the time. They work when they align with the true nature of the market.

When they do not align with the true nature of the market they fail and that is when deeper analysis is required to determine the true nature of the markets.

When we travel in a plane we observe the features of the land passing below us, like the observation of price bars. We may glance at the symbol representing the plane on a map on the TV screen in front of us. Notice how it tends to lag behind what we observe through the window, but generally speaking tells us where we are, what speed we are going and in what direction. However the rotation of the earth about its axis and its journey around the sun are things we are totally unaware of when considering the speed and direction of our plane. The only awareness we have of this background speed is through the effect it has on us i.e. day and night, summer and winter. We have to deduce our true speed and direction from indirect observations such as this.

Charlton
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