nine
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The best trading indicator is price bars (ohlc or candle to your preference) and volume if its available. Possibly you might use an ma or two (lazy mans trend lines) for support and resistance & confirming that trend did change or the alternative of trendlines and parallel channels.
The sooner you get rid of everything else the sooner you'll really start to develop your skills.
This sounds a little arrogant but I heard it repeatedly 10 years ago when I started (and didn't heed it) and it is still the wisdom that comes over and over from successful traders. One of the few who doesn't here, Grey1, uses a CCI but I think he could substitute the same SMA just as easily.
The sooner you get rid of everything else the sooner you'll really start to develop your skills.
This sounds a little arrogant but I heard it repeatedly 10 years ago when I started (and didn't heed it) and it is still the wisdom that comes over and over from successful traders. One of the few who doesn't here, Grey1, uses a CCI but I think he could substitute the same SMA just as easily.
Hello Subbie,
During my first losing 2 yrs of indicator trading which included using the ones you have noted and more, I realised that they were lagging the most important factor which is PRICE action at levels of support (demand) and resistance (supply).
Less is more as far as indicators are concerned.IMHO.
Good luck. (oops posted same time as nine)
Hi,
Most people have eyeballs, these are attached to your brain with a nerve, unfortunately, Darwin didn't take the markets into consideration when he come up with his theory of evolution, as the markets seem to create a devolving state of mind and body, more fool Darwin.
desireebruce
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I was taught to use Parabolic SAR, MACD, Bollinger bands and Support and Resistance. I'm a newbie trader too and my preference is support and resistance and the MACD. Too much information to my limited knowledge seems to work against me.
Desiree
Desiree
nine
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Subbie,
It does seem to be an evolutionary process. People start off with lots of indicators probably because they seek a certainty that isn't present in trading. They start with indicators that tell the same thing (and are thus, more than usually useless) and then pare them down as they realize the ineffectiveness of those indicators. Indicators are the passion of analysts, price and s&r are the passion of traders.
Personally I wrote 1000s and 1000s of lines of indicator code for Sierra Chart even as I was abandoning indicators. I now have 1 ema on some of my charts and none on others. I have had (and I group them here so you don't have repeats - 1 is enough as you learn to drop them):
Trend: ema, sma, wma, hull mas, t3 mas, macds
Acceleration (oscillators): macd, stoch, cci, rsi
Acceleration might have gone too far: Oscillators at extremes + keltners and bollinger bands (range extension).
Acceleration decreasing (so trend might be stopping, divergence): macd, stoch, cci, rsi
Support and resistance: true horizontal s&r, trend lines, trend channels, moving averages that often provide the early bounce points in a trend.
I now only have the last one because when price trades over a well chosen ma for a while you can be more sure of current trend (but you can do just as well with progression of s&r (moving hhs and lls)) but most importantly because its a lazy way of drawing the initial trend line that price is likely to bounce at. So, one ma, because it saves me drawing trendlines and trend channels.
All else is great fun but essentially empty of meaning.
I wish you well. The faster you evolve to recognize and move through that emptiness the more likely you are to make it to being a trader.
It does seem to be an evolutionary process. People start off with lots of indicators probably because they seek a certainty that isn't present in trading. They start with indicators that tell the same thing (and are thus, more than usually useless) and then pare them down as they realize the ineffectiveness of those indicators. Indicators are the passion of analysts, price and s&r are the passion of traders.
Personally I wrote 1000s and 1000s of lines of indicator code for Sierra Chart even as I was abandoning indicators. I now have 1 ema on some of my charts and none on others. I have had (and I group them here so you don't have repeats - 1 is enough as you learn to drop them):
Trend: ema, sma, wma, hull mas, t3 mas, macds
Acceleration (oscillators): macd, stoch, cci, rsi
Acceleration might have gone too far: Oscillators at extremes + keltners and bollinger bands (range extension).
Acceleration decreasing (so trend might be stopping, divergence): macd, stoch, cci, rsi
Support and resistance: true horizontal s&r, trend lines, trend channels, moving averages that often provide the early bounce points in a trend.
I now only have the last one because when price trades over a well chosen ma for a while you can be more sure of current trend (but you can do just as well with progression of s&r (moving hhs and lls)) but most importantly because its a lazy way of drawing the initial trend line that price is likely to bounce at. So, one ma, because it saves me drawing trendlines and trend channels.
All else is great fun but essentially empty of meaning.
I wish you well. The faster you evolve to recognize and move through that emptiness the more likely you are to make it to being a trader.
I've just decided my top 10 inidcators. Was thinking I should maybe had ultra trend in there too. But in all honestly so many indicators highlight the same turns and the same fake moves they all become much of a muchnes. I do like indicators but I think your trading changes as you gain more experience.
My Top 10 Indicators
Personally I think given time you learn to see price action and how an indicator would behave if it were on the chart. For example I think it is quite easy to spot where a standard bolly band would narrow.
But agree with the comments on using Price. I would say I made my biggest profits when trading breakouts or suchlike. Price and horizontal lines are the way forward imo.
My Top 10 Indicators
Personally I think given time you learn to see price action and how an indicator would behave if it were on the chart. For example I think it is quite easy to spot where a standard bolly band would narrow.
But agree with the comments on using Price. I would say I made my biggest profits when trading breakouts or suchlike. Price and horizontal lines are the way forward imo.
everyonerich
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trying to find 'best' indicator is same thing as predicting your spouse's thinking.
in reality, there are couple has been married for 50 years try ask them if able to predict each other.. the answer is no.
in reality, there are couple has been married for 50 years try ask them if able to predict each other.. the answer is no.
oildaytrader
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The only indicator known to be profitable in back tests is a contrarian indicator.It does the opposite to lagging indicators.
sighthound
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Fwiw,my account balance is the best indicator as to what is useful and what is not!
timsk
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. . . and what does your account balance indicate?
oildaytrader
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All indicators are useful , although lagging and fakey,traders must know how to use them in conjunction with t/l,p/a and other related info
spreadbettingportal
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All the above indicators are important, first learn better your test accounts.
sighthound
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A good indication of my level of understanding,still a beginner just looking and learning the various types and methods of trading to see what suits my own abilitys.
rathcoole_exile
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:idea:bl@@dy hell Ken, keep shtumm ferfuxake will ya ?
don't be giving away the Keys to the Kingdom with your first post !
don't be giving away the Keys to the Kingdom with your first post !
oildaytrader
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Stochastic is a great indicator,unfortunately most people do not know how to use indicators correctly.
It is good for entry confirmation and for exits at the end of a trend.
It is good for entry confirmation and for exits at the end of a trend.
neil
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Thats it - you've given away the keys to the kingdom
What will the snakeoil vendors do now to lure in suckers with their "wealth creating" indicators and systems.:whistling
oildaytrader
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Thats it - you've given away the keys to the kingdom
What will the snakeoil vendors do now to lure in suckers with their "wealth creating" indicators and systems.:whistling
Design automated software and sell it .Create zupconite 100 % profitable method for gamblers , without house limits and rules.:cheesy:
