Best FTSE / DOW Indicators?

[OlympicBlue]

I advise against daytrading, however I do use shortterm indicators in my swing
trading, look for the day of the week factor, morning/afternoon trend symetry,
and the 200 bar average for like 30min and 15 min charts, but not shorter,
also advencing issues vs declining issues,

indicators not to use are:
RSI, MACD ....your possible persception of news releases, ignore news altogether!

Thanks for your response.

RSI and MACD are mentioned a lot – I will take your view on board.

Ignore news altogether –I am surprised by this – why would you ignore the news - I would have thought this crucial?

What are your reasons for advising against day trading?

Your comments about your use of a 200 bar moving average seems to have created some debate – although – as novice - I don’t understand how this works

 

[Lord Flasheart]

Olympic, these are just opinions,some people trade using news alone, some using tech anal,some volume,some tape read,some look at charts,some price action. Getting mind right first is the most important thing

 

[Greywell1]

Lol there is so such good stuff on this the only problem is finding it. IMO as a new trader my advice would be to watch the market and learn its patterns and price action to begin with. Then Id really work out a plan as discipline and money manaegment are the most important things to learn. A simple moving average can reap rewards if used correctly.

Not really a 'footsie' item. but I love Kenny too!

 

[vergis92]

Thanks for your response.

RSI and MACD are mentioned a lot – I will take your view on board.

Ignore news altogether –I am surprised by this – why would you ignore the news - I would have thought this crucial?

What are your reasons for advising against day trading?

Your comments about your use of a 200 bar moving average seems to have created some debate – although – as novice - I don’t understand how this works

Actually I have tried day-trading, after reading a book called 'sniper trading' I have
kept the Day of the week factor, and market symetry appear too often, but I don't
think daytrading was for me , it may work for you I don't know,

I can take a weekly trade, like this week my indicators suggest the market will
most likely rally, but I cannot predict a counter day, news releases can cause single
day counter movement but cannot change the trend on the daily chart,
news headlines like on yahoo and TV channels are completely wrong, almost always
trying to explain a days movement citing unrelated causes, that's the job of tv presenters, also it's very hard to make sense of news because one day is seen as
positive and another day a similar news is seen as bad...
The only sure thing about news is that if the market or a share rises on bad news
then it will most likely rise further in the following days to at least double that days
gains, equally if say the DOW falls 200points on a good news day then it will sure
decline another 200 in comming days without much counter rally

Market is intimidating enough, I prefer small size swing trading, I can tolerate
a counter day easily, I won't miss gap opens in my favour , little stress, I can use the day of the week indicator and only need 30 mins a day,

there's people who daytrade successfully but have many years of experience and
we are not even close to them,, all in all I think that most of losing traders are daytraders in the making, in swing trading I can lose and I can gain it all back,
in daytrading you can have the market shake you out of a trade only to gap back
at next open, very irritating
it's highly unlikely that you will find a working system
for like 15minutes to 3 hours trades that will work consistently month after month
but good luck anyway.

 

[OlympicBlue]

......news headlines like on yahoo and TV channels are completely wrong, almost always
trying to explain a days movement citing unrelated causes, that's the job of tv presenters, also it's very hard to make sense of news because one day is seen as
positive and another day a similar news is seen as bad...
The only sure thing about news is that if the market or a share rises on bad news
then it will most likely rise further in the following days to at least double that days
gains, equally if say the DOW falls 200points on a good news day then it will sure
decline another 200 in comming days without much counter rally

Market is intimidating enough, I prefer small size swing trading, I can tolerate
a counter day easily, I won't miss gap opens in my favour , little stress, I can use the day of the week indicator and only need 30 mins a day.........

Vergis,

Thanks for responding to my queries,

I take your point about newscasters and Yahoo headlines for example, but what I was really referring to was news feed from the likes of Reuters or Bloomberg etc. which can undoubtedly effect share movement.

For example just recently, if you took the view that trouble was brewing at EasyJet when it was muted that Sir Stelios was in disagreement with the board, you could have taken a short position and benefited from the resulting 15% share price slide that followed.

When you say “The only sure thing about news is that if the market or a share rises on bad news then it will most likely rise further in the following days to at least double that days gains” – is this based on your premise that the share value must therefore be stronger than the new surrounding it at this time? For it to then go on to make double gains in the following days would certainly suggest an extremely strong surge, or is this to do with identifying measured movement, for example like that suggested by ‘Gann theory’?

Likewise when you say “equally if say the DOW falls 200 points on a good news day then it will sure decline another 200 in coming days without much counter rally” - are you indicating that in this instance, the declining trend would be so strong that it will no longer be affected by the release of any ‘good’ news? I wouldn’t have thought principles like those referred by ‘Gann’ could be applied to index movement?

Finally, when you refer to ‘swing trading’ is this a method based on looking for ‘reversals’ in the index or a share price? Also would be interested if you could expand on what you mean by using the “day of the week indicator”

Any reply you can make would be appreciated.

 

[vergis92]

Vergis,

Thanks for responding to my queries,

I take your point about newscasters and Yahoo headlines for example, but what I was really referring to was news feed from the likes of Reuters or Bloomberg etc. which can undoubtedly effect share movement.

For example just recently, if you took the view that trouble was brewing at EasyJet when it was muted that Sir Stelios was in disagreement with the board, you could have taken a short position and benefited from the resulting 15% share price slide that followed.

When you say “The only sure thing about news is that if the market or a share rises on bad news then it will most likely rise further in the following days to at least double that days gains” – is this based on your premise that the share value must therefore be stronger than the new surrounding it at this time? For it to then go on to make double gains in the following days would certainly suggest an extremely strong surge, or is this to do with identifying measured movement, for example like that suggested by ‘Gann theory’?

Likewise when you say “equally if say the DOW falls 200 points on a good news day then it will sure decline another 200 in coming days without much counter rally” - are you indicating that in this instance, the declining trend would be so strong that it will no longer be affected by the release of any ‘good’ news? I wouldn’t have thought principles like those referred by ‘Gann’ could be applied to index movement?

Finally, when you refer to ‘swing trading’ is this a method based on looking for ‘reversals’ in the index or a share price? Also would be interested if you could expand on what you mean by using the “day of the week indicator”

Any reply you can make would be appreciated.

Hi,

I just mean that when the market moves counter to the news is because of a different
stronger cause, there's no way to predict the exact high/low but it almost always
goes like this, Say dow jones fall X points while there's good news, you can expect
at least another X points down in the comming days, it may be a single mirror day
or decline spread over several days, this ain't gann stuff. simply the cause that moved
the market is powerful and news don't matter or is already priced in.


I do swing charting analysis to determine daily trend on nasdaq, always check the nasdaq
no matter what you are trading, this is gann swing theory, works good in a trending market but fails in a ranging market, no very useful use on its own but offers great
signals, like in early September I did see current decline coming, Dow was in uptrend
but nasdaq had breached its swing low and was making a fasle rally lagging the dow


Day of the week indicator, it's a high probability statistic it works very well during
uptrends, in a nutshell it states that the market will rally in the first half of the week,
there will be at least one big day up between monday and wednesday,
if monday doesn't rally and closes flat there's a great chance on tuesday,

Wednesday is the most volatile day of the week and usually small range with
little volume,

Thursday is the weakest day of the week, most declines and intradays lows occur
on Thursdays... However if the reverse happens and all Monday, Tuesday, wed don't
offer the rally then Thursday becomes counter trend day, it will rally on Thursday!


Fridays can go either way,


This is been backtested going back 20 years by George Angel, he's no joker author,
he's a trader himself and I have seen the market confirm his claims

 

[OlympicBlue]

Hi,

I just mean that when the market moves counter to the news is because of a different
stronger cause, there's no way to predict the exact high/low but it almost always
goes like this, Say dow jones fall X points while there's good news, you can expect
at least another X points down in the comming days, it may be a single mirror day
or decline spread over several days, this ain't gann stuff. simply the cause that moved
the market is powerful and news don't matter or is already priced in.


I do swing charting analysis to determine daily trend on nasdaq, always check the nasdaq
no matter what you are trading, this is gann swing theory, works good in a trending market but fails in a ranging market, no very useful use on its own but offers great
signals, like in early September I did see current decline coming, Dow was in uptrend
but nasdaq had breached its swing low and was making a fasle rally lagging the dow


Day of the week indicator, it's a high probability statistic it works very well during
uptrends, in a nutshell it states that the market will rally in the first half of the week,
there will be at least one big day up between monday and wednesday,
if monday doesn't rally and closes flat there's a great chance on tuesday,

Wednesday is the most volatile day of the week and usually small range with
little volume,

Thursday is the weakest day of the week, most declines and intradays lows occur
on Thursdays... However if the reverse happens and all Monday, Tuesday, wed don't
offer the rally then Thursday becomes counter trend day, it will rally on Thursday!


Fridays can go either way,


This is been backtested going back 20 years by George Angel, he's no joker author,
he's a trader himself and I have seen the market confirm his claims

Vergis,

Thanks for your reply.

Take your point about powerful market movement and relation to news and the pricing in of stock.

Regarding impact of the Nasdaq – at the moment I am not familiar with ‘swing charting analysis’, or Gann although have read about this. Is this complicated?

Finally, with regard your explanation of the “Day of the week indicator” the analysis would seem to be based on historical data only? Would this be correct?

 

[vergis92]

Vergis,

Thanks for your reply.

Take your point about powerful market movement and relation to news and the pricing in of stock.

Regarding impact of the Nasdaq – at the moment I am not familiar with ‘swing charting analysis’, or Gann although have read about this. Is this complicated?

Finally, with regard your explanation of the “Day of the week indicator” the analysis would seem to be based on historical data only? Would this be correct?

yes swing trading on gann theory is quite complex and has been modified by
many chartists eversince, right now it would tell you markets are in down-trend
and that the trend would change if the recent swing high is breached...
but leading indicators suggest that the market is about to bottom out again
and move higher, looks conflicting
the problem with swing theory is false signals, ranging market activity.
I regard it as a lagging confirming indicator that carries a lot of weight because
it's followed by 1000's of chartists who trade with a lot of money
swing trading is based on rigid rules but markets are often dictated by short term
economic indicators and fundamental concern at that point any mechanical trading
system fails


The day of the week factor is only a statistic, something to be suspicous about,
just last week we had a counter trend rallying Thursday, market dropped sharply at opened and finally closed much higher, it's a strong probability event , if and when we
rally watch Thursdays for a while, in rallying weeks they will be the weak days, or at least
making a sharp intraday low

 

[OlympicBlue]

yes swing trading on gann theory is quite complex and has been modified by
many chartists eversince, right now it would tell you markets are in down-trend
and that the trend would change if the recent swing high is breached...
but leading indicators suggest that the market is about to bottom out again
and move higher, looks conflicting
the problem with swing theory is false signals, ranging market activity.
I regard it as a lagging confirming indicator that carries a lot of weight because
it's followed by 1000's of chartists who trade with a lot of money
swing trading is based on rigid rules but markets are often dictated by short term
economic indicators and fundamental concern at that point any mechanical trading
system fails


The day of the week factor is only a statistic, something to be suspicous about,
just last week we had a counter trend rallying Thursday, market dropped sharply at opened and finally closed much higher, it's a strong probability event , if and when we
rally watch Thursdays for a while, in rallying weeks they will be the weak days, or at least
making a sharp intraday low

Vergis,

Thanks for your reply.