Using MACD, Stoc, and RSI all together.

[MajorDutch]

One of the problems with indicators is that each indicator line is an average of a number of different values produced by repeating each calculation for each tick. If you program an EA carelessly, if will pick up the value from one tick which may be way different from the average value you see depicted by the line.

Another indicator problem is the time lag. By the time an indicator movement is able to be shown, events have moved on. This is not such a problem for longer term EAs but is a disaster for scalpers.

of course the EA you are selling doesn't suffer from these problems

what you say is a steaming pile of horse carp. scaplers can use indicator to get a read on trend, momentum and then use PA to take trades.

 

[DionysusToast]

The problem with indicators is that they are based on a 'purists' view of the markets.

By this, I mean the view that the markets are driven by pure supply and demand. If this were true, if it were all about pepole buying because they wanted to buy and selling because they wanted to sell, all would be well with the world.

The people on here USING the indicators aren't buying for any 'pure' market driven reason. They are just out to buy because they think some idiot will pay more later.

Retail traders tend to look at the markets as if the game they are playing - pure speculation - is different from the game everyone else is playing.

The fact is, at times, we have a lot of volume and the market zooms in one direction. A fundamental event has triggered a lot of buying or selling. On these days, speculators have an easy job.

On days where we don't have these events, the moves in the market are basically driven by people trying to screw other people. Speculators are pushing the market one way and the other, people are puking all over the place, people are getting the shaft, people are doing some shafting. In this environment, when the market is all about people trying to give each other the shaft, how on earth can you apply the theories written in 30 year old TA books?

Oversold, moving back up? Cool, we'll buy. What's that? someone just dropped 3000 contracts and knocked price down 3 levels? Run, run, run....

The markets are gamed. All of the theory behind those oscillators, bands, candlesticks all go out the window in this environment.

You'd be much better placed looking at a naked chart and try to figure out where the orders are sitting than trying to get something out of these old relics.

 

[999cjb]

Well, this seems to have stirred up a pile of -er - interest, doesn't it?

I thought this was going to be a nice friendly forum. Please don't prove me wrong.

Personally I will use indicators, price action or anything else that can be proved to work consistently in any EA I write.

I have used combinations of macd, stoch and rsi but am not using these combinations in any current EA I am running. So for me, at least, this combo didn't work. But that doesn't mean it won't work for you. Cheers.

 

[MajorDutch]

The problem with indicators is that they are based on a 'purists' view of the markets.

By this, I mean the view that the markets are driven by pure supply and demand. If this were true, if it were all about pepole buying because they wanted to buy and selling because they wanted to sell, all would be well with the world.

The people on here USING the indicators aren't buying for any 'pure' market driven reason. They are just out to buy because they think some idiot will pay more later.

Retail traders tend to look at the markets as if the game they are playing - pure speculation - is different from the game everyone else is playing.

The fact is, at times, we have a lot of volume and the market zooms in one direction. A fundamental event has triggered a lot of buying or selling. On these days, speculators have an easy job.

On days where we don't have these events, the moves in the market are basically driven by people trying to screw other people. Speculators are pushing the market one way and the other, people are puking all over the place, people are getting the shaft, people are doing some shafting. In this environment, when the market is all about people trying to give each other the shaft, how on earth can you apply the theories written in 30 year old TA books?

Oversold, moving back up? Cool, we'll buy. What's that? someone just dropped 3000 contracts and knocked price down 3 levels? Run, run, run....

The markets are gamed. All of the theory behind those oscillators, bands, candlesticks all go out the window in this environment.

You'd be much better placed looking at a naked chart and try to figure out where the orders are sitting than trying to get something out of these old relics.

from my observations in thin markets it is easier for the larger players to gun for stops and if they can they will. I know of people who use indicator and pure PA combined successfully. So taking the example of any instrument in a downtrend. We could use indicators on a multi t/f to confirm downtrend, momentum indicators in addition, these would set the conditions for our entry. The entry is then on pure PA of a naked chart. There is no point gunning for a trade unless we know where S/R, pivots etc a full assessment of the current PA is required.

Why do indicators help in identifying the correct conditions for the trade? for me they help with negating confirmation bias.

 

[Johnnyalpha8]

from my observations in thin markets it is easier for the larger players to gun for stops and if they can they will. I know of people who use indicator and pure PA combined successfully. So taking the example of any instrument in a downtrend. We could use indicators on a multi t/f to confirm downtrend, momentum indicators in addition, these would set the conditions for our entry. The entry is then on pure PA of a naked chart. There is no point gunning for a trade unless we know where S/R, pivots etc a full assessment of the current PA is required.

Why do indicators help in identifying the correct conditions for the trade? for me they help with negating confirmation bias.

You have to watch out for those 'stop-hunters', right along with the tooth-fairy and the boogey-man. I'm sure they all really exist!!

 

[DionysusToast]

There's another way to view the mythical 'stop hunter'.

Fact is - when longs get stopped out, they do so by selling.

When stops are likely to exist in a certain area, it is effectively a bunch of people with cheap contracts/stock below the current market price.

As such, our expectation should be that the market will seek out these contracts, just as you might drive past Sainsburys to Tescos because they have your favourite whiskey on sale.

 

[MajorDutch]

There's another way to view the mythical 'stop hunter'.

Fact is - when longs get stopped out, they do so by selling.

When stops are likely to exist in a certain area, it is effectively a bunch of people with cheap contracts/stock below the current market price.

As such, our expectation should be that the market will seek out these contracts, just as you might drive past Sainsburys to Tescos because they have your favourite whiskey on sale.

spot on. You only have to look at the PA around prices of interest to this happening. and at news time it's rampant that is where plenty of cash leaves retail pockets and is deposit with the larger players.

 

[eegozi]

The problem with indicators is that they are based on a 'purists' view of the markets.

By this, I mean the view that the markets are driven by pure supply and demand. If this were true, if it were all about pepole buying because they wanted to buy and selling because they wanted to sell, all would be well with the world.

The people on here USING the indicators aren't buying for any 'pure' market driven reason. They are just out to buy because they think some idiot will pay more later.

Retail traders tend to look at the markets as if the game they are playing - pure speculation - is different from the game everyone else is playing.

The fact is, at times, we have a lot of volume and the market zooms in one direction. A fundamental event has triggered a lot of buying or selling. On these days, speculators have an easy job.

On days where we don't have these events, the moves in the market are basically driven by people trying to screw other people. Speculators are pushing the market one way and the other, people are puking all over the place, people are getting the shaft, people are doing some shafting. In this environment, when the market is all about people trying to give each other the shaft, how on earth can you apply the theories written in 30 year old TA books?

Oversold, moving back up? Cool, we'll buy. What's that? someone just dropped 3000 contracts and knocked price down 3 levels? Run, run, run....

The markets are gamed. All of the theory behind those oscillators, bands, candlesticks all go out the window in this environment.
You'd be much better placed looking at a naked chart and try to figure out where the orders are sitting than trying to get something out of these old relics.

Hmmm,...even though I usually agree with much of what you say I will strongly disagree here. Yes indicators are lagging and in a choppy market that is volatile it is difficult to use these indicators but not imposible. I have done quite well despite being a trend follower and use these indicators all the time even in a choppy environment. It can be done...you just have to know when to use a trend indictaor and when to use an oscillator. Some people think of them as mutually exclusive (one OR the other) but I view them as interconnected (one PLUS the other). Depending on your timeframe you can apply these indicators. On one TF it may act as an oscillator and on another (longer TF) a trend indicator.

I am not saying that there is no merit to using PA alone to trade but I learned using indicators and I'm doing quite well with it. I just shake my head in dismay when I read all the "Indicators are horse****" type of posts. I will say again,...to say that indicators are useless is like telling a carpenter that his hammer and saw are a piece of **** because you can not make the same beautiful desk and dresser that he can. If you do not know how to use them effectively then ANY tool is useless.

We all trade our own beliefs,... I believe these indicators are highly usefull others do not.

 

[wackypete2]

Hmmm,...even though I usually agree with much of what you say I will strongly disagree here. Yes indicators are lagging and in a choppy market that is volatile it is difficult to use these indicators but not imposible. I have done quite well despite being a trend follower and use these indicators all the time even in a choppy environment. It can be done...you just have to know when to use a trend indictaor and when to use an oscillator. Some people think of them as mutually exclusive (one OR the other) but I view them as interconnected (one PLUS the other). Depending on your timeframe you can apply these indicators. On one TF it may act as an oscillator and on another (longer TF) a trend indicator.

I am not saying that there is no merit to using PA alone to trade but I learned using indicators and I'm doing quite well with it. I just shake my head in dismay when I read all the "Indicators are horse****" type of posts. I will say again,...to say that indicators are useless is like telling a carpenter that his hammer and saw are a piece of **** because you can not make the same beautiful desk and dresser that he can. If you do not know how to use them effectively then ANY tool is useless.

We all trade our own beliefs,... I believe these indicators are highly usefull others do not.

Keep in mind that you are arguing with vendors.

Peter

 

[bbmac]

Good post.

Whether or not they 'work' / are useful for the reasons they were intended, there is no doubt that they can, in certain markets in particular, tell you something about price that price alone cannot...and even if that is in dispute by some - what cannot be in dispute is that they, like price itself and indeed with price, develop repeating patterns that can be traded with a high probability given certain other conditions connected with price, and other studies.

G/L

Hmmm,...even though I usually agree with much of what you say I will strongly disagree here. Yes indicators are lagging and in a choppy market that is volatile it is difficult to use these indicators but not imposible. I have done quite well despite being a trend follower and use these indicators all the time even in a choppy environment. It can be done...you just have to know when to use a trend indictaor and when to use an oscillator. Some people think of them as mutually exclusive (one OR the other) but I view them as interconnected (one PLUS the other). Depending on your timeframe you can apply these indicators. On one TF it may act as an oscillator and on another (longer TF) a trend indicator.

I am not saying that there is no merit to using PA alone to trade but I learned using indicators and I'm doing quite well with it. I just shake my head in dismay when I read all the "Indicators are horse****" type of posts. I will say again,...to say that indicators are useless is like telling a carpenter that his hammer and saw are a piece of **** because you can not make the same beautiful desk and dresser that he can. If you do not know how to use them effectively then ANY tool is useless.

We all trade our own beliefs,... I believe these indicators are highly usefull others do not.

 

[bbmac]

Gbpusd gave a good example earlier today of what I am talking about in post above...Uk Cpi/Rpi data comes out at 0930am...and after a downside move on the close of the 0930am 5min candle price continues down to the 50% of the 5542-5851 (Friday/Last Week's hi) move confluence with Daily S1. A 3rd party market info vendor was also touting bids either side of the 5700 round no...so We had some 'potential' support there....sure enough a 30min and then 1hr Pinbar candle developed on some buying from there but ahead of those and using lagging indicators as potentially leading indicators, both the 1min and 3min developed a repeating bullish divergence based pattern that on the close of the bullish pa candle trigger as confirmation could get you in ahead of the 30m/1hr candles closing...3min is shown below..1hr potential supp/res chart also below - Daily S1 not shown on this chart but you can see the said 50% fib there.

Just one example of the potential usefulness of indicators but I guess as the poster above said (eegozi) you either believe they are useful or not and trade an edge accordingly.

I guess the 'do they or don't' they debate will rumble on.

G/L

 

[Joules MM1]

The problem with indicators is that they are based on a 'purists' view of the markets.

By this, I mean the view that the markets are driven by pure supply and demand. If this were true, if it were all about pepole buying because they wanted to buy and selling because they wanted to sell, all would be well with the world.

The people on here USING the indicators aren't buying for any 'pure' market driven reason. They are just out to buy because they think some idiot will pay more later.

Retail traders tend to look at the markets as if the game they are playing - pure speculation - is different from the game everyone else is playing.

The fact is, at times, we have a lot of volume and the market zooms in one direction. A fundamental event has triggered a lot of buying or selling. On these days, speculators have an easy job.

On days where we don't have these events, the moves in the market are basically driven by people trying to screw other people. Speculators are pushing the market one way and the other, people are puking all over the place, people are getting the shaft, people are doing some shafting. In this environment, when the market is all about people trying to give each other the shaft, how on earth can you apply the theories written in 30 year old TA books?

Oversold, moving back up? Cool, we'll buy. What's that? someone just dropped 3000 contracts and knocked price down 3 levels? Run, run, run....

The markets are gamed. All of the theory behind those oscillators, bands, candlesticks all go out the window in this environment.

You'd be much better placed looking at a naked chart and try to figure out where the orders are sitting than trying to get something out of these old relics.

that is an instant soup summary.....with the right ingredients!

as for not all indicators are useless, well, true, they are a feel good reason to make a trade and with enough discipline can do "the" job so then that defines the extent of your income......so, sure, this indicator, proprietory or otherwise, can do the job but the extent of your income is restricted by that and no, indicators do not lower your risk and they do raise your time versus task....i don't trade with indicators and am fortunate that someone taught me the virtues of reading flow, tape and intent as per the ingredients of the instant soup.....trading is not like carpentry....it's like a grunting rugby match where the guy running toward you, at pace, drops the left shoulder then fakes right.....the trend is when the front forward pack steamrolls everyone and its in fluid motion not boxed like an indicator.....indicators are from a period when you could make a call in a bull phase and get away gratis and never know you had made the biggest fake look honest.....so, if you want to be imprisoned by an invented rule or regime then that defines the extent of your income.....nothing wrong with that if that's all you are interested in achieving......

when you use an indicator your asking someones invention to ring the bell for you, it's a cover for your lack of knowledge and interpretation......nothing wrong with that....but, beware.......i see a lot of traders say the same stuff and i know they'll empty their accounts even if theyre not already in the process of doing so....."nothing wrong with indicators" it's them fishing for real answers.......it's them quick-venting to box price action like a carpenter would approach the task......there's no such thing as right or wrong in an auction.....only extent

 

[DionysusToast]

trading is not like carpentry....it's like a grunting rugby match where the guy running toward you, at pace, drops the left shoulder then fakes right.....

Good analogy

when you use an indicator your asking someones invention to ring the bell for you, it's a cover for your lack of knowledge and interpretation......

Excellent stuff Joules. The whole post - not just these things...

 

[Splitlink]

I found that you can make profits as long as you increase the size of your next bet, after a loss however this is very nerve racking, and feels like reckless gambling. And a spiral of this = blown account.

And I am now after some advice on how to combine these 3 indicators.

Is it basically, RSI in oversold, MACD Long Cross, and Stock Long Cross and then go Long / Visa Versa?

Thanks

I think that the above statement is the sillliest one that I have read on this thread.

I am not about to go into detail about which indicator is the best. I don't use any of those. I did think that all were useless but I see, presumably, successful traders print their charts with an indicator included so I am prepared to live and let live on that argument.

I use averages and Bollinger bands because they indicate to me overbought/ oversold positions and trends.

At least, to me, they do. Rightly or wrongly is open to debate.

Why do I think your quote silly. Because, if you increase your bet size because you make money that way, it means that you do not make it if you don't! Of course, you will end up with a blown account! It is the law of averages.

 

[Splitlink]

tarders who say indicators don't work are talking guff. See pic of my set up.

And the Best of British Luck with that one, mate!

I suppose one of them, at least, must work.

 

[Ambrose Ackroyd]

Using MACD, Stoc, and RSI all together.

Been there, done it, read the book, seen the movie and got the T-shirt.

Complete and utter waste of f**king time IMHO.

 

[eegozi]

that is an instant soup summary.....with the right ingredients!

as for not all indicators are useless, well, true, they are a feel good reason to make a trade and with enough discipline can do "the" job so then that defines the extent of your income......so, sure, this indicator, proprietory or otherwise, can do the job but the extent of your income is restricted by that and no, indicators do not lower your risk and they do raise your time versus task....i don't trade with indicators and am fortunate that someone taught me the virtues of reading flow, tape and intent as per the ingredients of the instant soup.....trading is not like carpentry....it's like a grunting rugby match where the guy running toward you, at pace, drops the left shoulder then fakes right.....the trend is when the front forward pack steamrolls everyone and its in fluid motion not boxed like an indicator.....indicators are from a period when you could make a call in a bull phase and get away gratis and never know you had made the biggest fake look honest.....so, if you want to be imprisoned by an invented rule or regime then that defines the extent of your income.....nothing wrong with that if that's all you are interested in achieving......

when you use an indicator your asking someones invention to ring the bell for you, it's a cover for your lack of knowledge and interpretation......nothing wrong with that....but, beware.......i see a lot of traders say the same stuff and i know they'll empty their accounts even if theyre not already in the process of doing so....."nothing wrong with indicators" it's them fishing for real answers.......it's them quick-venting to box price action like a carpenter would approach the task......there's no such thing as right or wrong in an auction.....only extent

Wow,...I WISH I knew as much as you do oh wise one....all sarcasm intended.

You act as if you know everything and that "indicators" are going to limit "the extent of my income". I haven't heard a bigger piece of HORSE**** on this site until this post. Congratulations.:clap:

As for limiting my income,...you dont know a thing about what income I have gained using these indicators. You can act all high amd mighty if thats what you need to sleep better at night but reality shows that they are useful when used correctly.

This "all indicators are stupid" thought that prevails on this site really is such an ignorant statement that it never ceases to amaze me. Again, if you have no idea how to use them,...yes its useless. When used correctly it is just a tool to help you achieve appropriate Reward:Risk.

If you have a profitable system then income is only limited by the number of trades you can come up with and your capital you have to trade,...regardless of methodology (TA or whatever)

 

[Joules MM1]

Wow,...I WISH I knew as much as you do oh wise one....all sarcasm intended.

You act as if you know everything and that "indicators" are going to limit "the extent of my income". I haven't heard a bigger piece of HORSE**** on this site until this post. Congratulations.:clap:

As for limiting my income,...you dont know a thing about what income I have gained using these indicators. You can act all high amd mighty if thats what you need to sleep better at night but reality shows that they are useful when used correctly.

This "all indicators are stupid" thought that prevails on this site really is such an ignorant statement that it never ceases to amaze me. Again, if you have no idea how to use them,...yes its useless. When used correctly it is just a tool to help you achieve appropriate Reward:Risk.

If you have a profitable system then income is only limited by the number of trades you can come up with and your capital you have to trade,...regardless of methodology (TA or whatever)

.......thankyou

 

[DionysusToast]

.......thankyou

You mean for him being one of the 95%????

 

[Joules MM1]

You mean for him being one of the 95%????

$$