I feel like im guessing.....

[meanreversion]

Is volatility not relevant when considering bet size? Irrespective of what the charts might say, surely some idea of volatility is beneficial, i.e. helps you place a stop somewhere beyond the noise?

 

[montmorencyt2w]

Is there anyway i can better perdict the moves of the market instead of just watchin indicator etc. I feel like im guessing ha

In a nutshell, try to learn as much as you can about the market(s) you are trading; what makes them tick (pun intended).

I happen to be in the minimal indicators camp, but I would not try to put you off indicators in a blanket way. You have to find what does and doesn't work for yourself, and who knows, you may stumble on the perfect set of indicators that most of us have missed.

While something stops me from completely agreeing that this is a probabilities game, what I have come round to thinking is that it is not a high-precision business. It is not a question of predictions but of making approximations. Growing experience may help you make better and better approximations. Guesses if you like, but at least calculated ones.

 

[oiltanker]

knowing the basis upon which institutions base trades [indicator or not] is something worth knowing? as far as i can see some do some don't. but i'm not plugged into that world.

 

[meanreversion]

I suppose it depends on what markets you trade. If you stick to one or two and have traded them for 10 years+, maybe indicators are not that important (although I still don't see how volatility cannot be a consideration).

 

[Black Swan]

In a nutshell, try to learn as much as you can about the market(s) you are trading; what makes them tick (pun intended).

I happen to be in the minimal indicators camp, but I would not try to put you off indicators in a blanket way. You have to find what does and doesn't work for yourself, and who knows, you may stumble on the perfect set of indicators that most of us have missed.

While something stops me from completely agreeing that this is a probabilities game, what I have come round to thinking is that it is not a high-precision business. It is not a question of predictions but of making approximations. Growing experience may help you make better and better approximations. Guesses if you like, but at least calculated ones.

Also don't obsess re. the perfect trade/and or method of trading, being good enough is often good enough..

 

[new_trader]

Does a moving average count as an indicator?

Yes, it does and as for candle patterns, very pretty...good for romantic dinners but not for trading.

 

[meanreversion]

I use moving averages to indicate whether the market is in an uptrend or a downtrend, and find them useful in that regard.

Each to their own

 

[new_trader]

I've struggled to find any statistical edge in indicators, over many different time frames (and I've tested out a LOT of indicator based strategies). What I have tended to find is that each indicator has its day in the sun, when it encounters the right conditions and becomes profitable, until such time as it stops being profitable. You might find that an indicator based set of rules works very well for a couple of years, and then bombs. How do you know when the indicator is just going through drawdown or its usefulness has expired? Tough one..

You post this nonsense then say "each to their own"...no wonder you are baffled. Time to leave you and your fellow guessers to their own...

 

[meanreversion]

Er what? The only thing I'm baffled by is your childish reaction.

 

[N Rothschild]

all trading is guess work, educated guesses perhaps but a guess none the less.

 

[new_trader]

Er what? The only thing I'm baffled by is your childish reaction.

Why do I bother...

I will quote you again

"I've struggled to find any statistical edge in indicators, over many different time frames (and I've tested out a LOT of indicator based strategies). What I have tended to find is that each indicator has its day in the sun, when it encounters the right conditions and becomes profitable, until such time as it stops being profitable. You might find that an indicator based set of rules works very well for a couple of years, and then bombs. How do you know when the indicator is just going through drawdown or its usefulness has expired? Tough one.."

So how is a moving average 'useful' to you after saying the above? Isn't that just a complete contradiction?

 

[meanreversion]

Well, if you thought about the order in which those comments came ... I enquired as to whether a moving average was an indicator AFTER this comment that you re-printed. In my mind, an indicator is MACD, or stochastics, RSI etc. These are the indicators which I've not found to be statistically useful (e.g. MACD crosses signal line thus buy, RSI goes below 70 thus sell)

However, I do use moving averages for a trend filter. I don't consider my system of trading to be indicator based, despite using MA for this purpose (hence the question).

Yet it seems that you are fundamentally opposed to the use of any indicator whatsoever, hence my "each to his own" comment, i.e. if YOU make money without any numerical calculation based on price, then good luck to you.

Please feel free to respond like a 12 year old, that's entirely your prerogative.

 

[trendie]

Well, if you thought about the order in which those comments came ... I enquired as to whether a moving average was an indicator AFTER this comment that you re-printed. In my mind, an indicator is MACD, or stochastics, RSI etc. These are the indicators which I've not found to be statistically useful (e.g. MACD crosses signal line thus buy, RSI goes below 70 thus sell)

However, I do use moving averages for a trend filter. I don't consider my system of trading to be indicator based, despite using MA for this purpose (hence the question).

Yet it seems that you are fundamentally opposed to the use of any indicator whatsoever, hence my "each to his own" comment, i.e. if YOU make money without any numerical calculation based on price, then good luck to you.

Please feel free to respond like a 12 year old, that's entirely your prerogative.

dont want to take this off-topic, but....

MR, I am curious as to your analysis that Stochastics are not statistically beneficial, especially as I trade them, and use them as primary indicators for my trading.

Could you give some general info as to how you tested them, what TFs, what instruments and over what span of time you tested them over?

these kinds of threads scare me, as I'm thinking my set-up is spuriously edgey, and I'm about to run into some account-busting bad luck.

 

[meanreversion]

I looked at the major currency pairs on various time frames between 1hr and 1 day (2hr, 4hr, 6hr, tried the lot) and attempted to find an indicator based system of trading that would show consistent profits over the last 5-10 years.

I explored all kinds of indicators.. I even went so far as to use a Bollinger Band of RSI (this is in "Bollinger on Bollinger Bands"). The notion of RSI crossing 30 or 70 seemed very artificial to me, so why not apply a band to the RSI itself and then you know when it's high or low relative to its moving average (one indicator on top of another on top of another, oh dear).

I couldn't find something consistent.. so then I started adding in pyramids and trailing stops to the equation, and things got interesting.

My conclusion to date is that position sizing and exits are more important than entries (I've mentioned this on other threads before). In my mind, indicators seem to facilitate entry and aren't especially useful for sticking with a winning position, OR telling you when to get out. There's too much noise for them to be useful in that way.

Any winning trader will have, at the end of the year, a few big trades that made money. I don't think indicators help you to stick with your winning trades, and an element of subjectivity can start to creep in as to which one you pick.

Obviously there will be many successful traders out there who do use indicators, these are just my results.

 

[dealer911]

Heres an indicator for you!.. S&P cuts Portugal ratings to A-/A-2; outlook negative
bad news!

 

[meanreversion]

It's news, but what trade should we do to make money from it?

 

[dealer911]

It's news, but what trade should we do to make money from it?

I'm an equity trader so I am short indices (this trouble WILL impact growth in eurozone)- not sure the implications on currencies - I always lose money trading FX.

 

[Adamus]

I don't see how you can trade in the absence of all indicators. How do you determine position size if you don't know the ATR, for example?

You put your hand in your pocket and check the size of your balls.

Only kidding.

Read "Blink" by Malcolm Gladwell. That's what I think the situation is. However I don't even know what 'price action' is, so i can't say anymore.

 

[meanreversion]

Emerging markets are being engulfed with a tidal wave of hot money, I'm not sure Greece/Portugal will affect equities globally in the short run. The trend in equities is up, I'd be a buyer on dips.

 

[dealer911]

Emerging markets are being engulfed with a tidal wave of hot money, I'm not sure Greece/Portugal will affect equities globally in the short run. The trend in equities is up, I'd be a buyer on dips.

I will be selling the rallies!.. thats what makes a market I guess -am also long Gold (bit of a crowded trade i know) If greece defaults then portugal will be next.. then Spain.. then maybe UK - this is a serious problem that the market has not yet priced in! my views only - we both need tight stops though! - good luck.