Indicators

Forming an opinion about how your chosen market is going to behave could be dangerous for a trader's wealth. The writer of this aricle argues that indicators make one form an opinion

http://www.esignallearning.com/education/marketmaster/Default.asp

Split

Forming opinions to trade? Based on what ? Does that match the reality?

hmmm, well yeah , there can be more to speculation than the old indicators that are pumped ?, so if we do use them to give us a reason to click the order buttons then its fair to say account equity is very liable to be wobbling like a big errrmmm wobbly thing....


Forming opinions to trade? Based on what ? Does that match the reality? well whats more probable to happen in that case?



PSI first then maybe and use price as the ultimate double agent .

That will be all Miss Funny Fanny.....

00Fx.



err,, its like that story of the bloke who was drowning and he shouted to a passer by ,its alright im waiting for god to save me, said the bloke in the drink , anyhoo, 3 boats with " normal " (hehe aint we all gods creatures though) sailed on by offering him a safe passage, but yep, that bloke said ,clear off, Im waitin for the big chief himself....

that boats sailed by on these boards....... you know who was rowin past on by, holdin an outstretched hand?

Wot no God

cheers.

fxmarkets said:

hmmm, well yeah , there can be more to speculation than the old indicators that are pumped ?, so if we do use them to give us a reason to click the order buttons then its fair to say account equity is very liable to be wobbling like a big errrmmm wobbly thing....


Forming opinions to trade? Based on what ? Does that match the reality? well whats more probable to happen in that case?



PSI first then maybe and use price as the ultimate double agent .

That will be all Miss Funny Fanny.....

00Fx.



err,, its like that story of the bloke who was drowning and he shouted to a passer by ,its alright im waiting for god to save me, said the bloke in the drink , anyhoo, 3 boats with " normal " (hehe aint we all gods creatures though) sailed on by offering him a safe passage, but yep, that bloke said ,clear off, Im waitin for the big chief himself....

that boats sailed by on these boards....... you know who was rowin past on by, holdin an outstretched hand?


Wot no God

cheers.

Click to expand...

You have to have faith, no doubt about it, but who do you have faith in?

http://www.fool.co.uk/news/comment/2006/c060829e.htm?source=ioodftxt0010001

Split

We Dont Know What We Do.... ?

Splitlink said:

(1) You have to have faith, no doubt about it, (2) but who do you have faith in?


Split

Click to expand...

(1) well yes and no, if you perceive(and allow yourself to accept it) the evidence then faith doesnt come into it, that being a belief in something for which there is no evidence.

what we are open to receive , the evidence in front of us with trading , maybe requires us to have faith in ourselves if the evidence suggests we continue to behave at this time differently. Do we will it for ourselves?

(2). You and all that is similar

fat Q's on the above....

Splitlink said:

Forming an opinion about how your chosen market is going to behave could be dangerous for a trader's wealth. The writer of this aricle argues that indicators make one form an opinion

http://www.esignallearning.com/education/marketmaster/Default.asp

Split

Click to expand...

hi, split

It may be sacrilege to say, but I think that we always trade our opinion on its definition : judgement based on grounds short of proof. - unless we trade a coin toss, of course

We may wrap it up with phrases like "trade what you see, not what you think" but, even then, we are merely exercising our "opinion" that what we see has an x% probability of being followed by a favourable price move. We may mechanise our system to remove human frailty but, in essence, it still remains our "opinion" that applying it will bring reward. Other than in hindsight we have no proof.

good trading

jon

Splitlink said:

Forming an opinion about how your chosen market is going to behave could be dangerous for a trader's wealth. The writer of this aricle argues that indicators make one form an opinion

http://www.esignallearning.com/education/marketmaster/Default.asp

Split

Click to expand...

Of course indicators make you form an opinion, though I actually have them on my charts for aesthetic reasons - I like pretty colours and BTW I'm not a friend of Dorothy's.

If I have three SMAs of say 10 20 and 40 all in the correct order ascending over an afternoon on a 5min chart I would be tempted to stick my neck out and form the opinion that over that time period the market was trending up!

It would be foolish of me to suggest that traders do not use indicators. What I was pointing out was only an opinion.

I think that the author of that article made a good point when he suggested that some traders do form opinions based on indicators and articles in the press and, when they make a decision it is based more on what the indicator says, than what the chart is telling them, when a chart reader will see warning signs before the indicators tell him.

Rols, I suggest that head and shoulder formations can be forming quite clearly even while the 10, 20, and 40 averages are still trending happily upwards. The EOD daily charts are full of them. Here is one but there are plenty more.

Split

Please note on the extreme right, what has been lost to the trader by the time that the red (20) average is crossing the blue (40) and we have the averages in the proper order, again. They will then be signalling a downtrend. Well! Who would have guessed!

Split

Splitlink said:

Please note on the extreme right, what has been lost to the trader by the time that the red (20) average is crossing the blue (40) and we have the averages in the proper order, again. They will then be signalling a downtrend. Well! Who would have guessed!

Split

Click to expand...

As I said it was tempting to form an opinion. No need to preach to the converted about indicators, especially MAs... :cheesy:

I refer you to some answers i gave sometime ago...

rols said:

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.

Click to expand...

rols said:

To be honest I spent a few years looking at indicators and ended up with a bowl of spaghetti on my screen. I'm sure people do use indicators succesfully but IMO there are other skills that are being used which gives the impression that the indicators are leading them. Pretty much of the time IMO MA crossovers are about as much use as the proverbial chocolate teapot.

As for Woodies CCI, I 'd be brandishing a white stick if I'd carried on down that route.

On the subject of vaying data I noticed this a while back when I was involved in automation and came to the conclusion that back testing using indicators is also fairly useless. Then you have the question of continuous data or market hours data which produce very different indicator values again.
I'm afraid I'm with the majority here against indicators. But you have to come to that conclusion yourself before you can trade freely without them.
I like that saying - "hindsight is always 20/20."

Click to expand...

....and furthermore the head and shoulders pattern actually is thought to be pretty useless too.

The only time I use Head and Shoulders is in the shower...

rols said:

....and furthermore the head and shoulders pattern actually is thought to be pretty useless too.

The only time I use Head and Shoulders is in the shower...

Click to expand...

Depends on whether one focuses on the pattern or on the behavior that created the pattern. Same with "wedges", "flags", "pennants", and so on. The patterns as some sort of absolute are generally useless, but if one thinks about why they're forming and where they're forming, he can have a leg up.

For example, there are reasons why the "head and shoulders pattern" forms as it does, but the meat of it is the lower high and the trend break. Even if one had never heard of the H&S, those two elements would provide a fairly high-probability entry.

barjon said:

hi, split

It may be sacrilege to say, but I think that we always trade our opinion on its definition : judgement based on grounds short of proof. - unless we trade a coin toss, of course

We may wrap it up with phrases like "trade what you see, not what you think" but, even then, we are merely exercising our "opinion" that what we see has an x% probability of being followed by a favourable price move. We may mechanise our system to remove human frailty but, in essence, it still remains our "opinion" that applying it will bring reward. Other than in hindsight we have no proof.

Click to expand...

Probability is not proof of anything, but neither is it an opinion. The probability of a given outcome is based on the testing one has done. Only if the protocol is especially vague can one call the results "opinion". In other words, "the results of my testing suggest that" is not equivalent to "it is my opinion that".

As for hindsight, that doesn't provide proof either.

Splitlink said:

Forming an opinion about how your chosen market is going to behave could be dangerous for a trader's wealth. The writer of this aricle argues that indicators make one form an opinion

http://www.esignallearning.com/education/marketmaster/Default.asp

Split

Click to expand...

I use indicators. I use MA crosses. My crosses are 60% early(ideal), 20% late and 20% wrong. In tight range bound markets I limit my trades to a minimum to reduce losses. When my market (cable) really moves they are perfect. They are usually early and combined with Support and resistance for exits I do very well.

I can post a multitude of charts where they were spot on or early or plenty when they were far too late or completely wrong. I can also post as many charts as you like wher the perfect 'price based' setup appears and the same thing happens just like in the article.

I'm probably going to get slated for this post but I don't really care. Indicators or not, nothing is perfect and both will produce signals you took and it was blatantly wrong, or didn't and wish you had. same reasons and problems, different methods.

I don't know why indicators get so much stick. If you use them correctly and find a way to make them work in your favour more often than not, happy days. The one member on these boards who regulary posted consistent daily profit uses indicators...

wasp said:

I use indicators. I use MA crosses. My crosses are 60% early(ideal), 20% late and 20% wrong. In tight range bound markets I limit my trades to a minimum to reduce losses. When my market (cable) really moves they are perfect. They are usually early and combined with Support and resistance for exits I do very well.

I can post a multitude of charts where they were spot on or early or plenty when they were far too late or completely wrong. I can also post as many charts as you like wher the perfect 'price based' setup appears and the same thing happens just like in the article.

I'm probably going to get slated for this post but I don't really care. Indicators or not, nothing is perfect and both will produce signals you took and it was blatantly wrong, or didn't and wish you had. same reasons and problems, different methods.

I don't know why indicators get so much stick. If you use them correctly and find a way to make them work in your favour more often than not, happy days. The one member on these boards who regulary posted consistent daily profit uses indicators...

Click to expand...

Good luck to you if you are happy with it

However, unless you use something to do with volume indicators like accumulation etc. an indicator based on past price performance cannot give early signals. The only way that it can appear to forecast correctly is when it is synchronised with the cycle of the share price.. That will rarely last for very long.

I'm sorry, I'm a pig headed so and so when I do not see logic I'll never change so can only wish you Good Luck- but no stick!

Split

I think what the artical tells use is just basic and something even the new trader should be awer of, we NEVER know where the mareked is going anywhere and therefor hoping and building an opinion on where it will go next is just futile. Cause when our prediction dont go true, we suffer pain, especially when we are in a trade based on our opinion on where the marked is going.There is a book writen by mark dugles, called Trading in the zone, that takes on the different psycological aspect of trading,and why its the first reason why traders fail.

When it comes to using a indicator and form an opinion, i think thats wrong. An indicator just tells use what the marked allready have done and in what dirrecton it is pointing at the moment,not where it will be going with 100% curtenty.

Think this way, if there are 1million traders and everyone are looking at stochastics ,and i know many are, then stoch will become very reliable because everyone are looking at it and buying or selling accordingly therefor the marked moves on that direction .Trick is to go long or short on the same direction as the rest of the herd.

Anyways, im taking this thread to another topic, enough rant from me.

With regards
Bashir Naimy

i still think that trading with indicators are risky cause u can read it more than one way, but then i think the some of the best indicators or combination of them would be useless if the trader is does not see what the charts say.

I have come across friends who r so engrossed in their indicators they dont see what the price is doing. the chances of u surviving forex by trading price is higher than reading indicators........... but then again if a man is blind then it matters not if his driving a mercedes or a lemon........risk factor to his health is still a given!,..............