Found my new home and am ready to chat

brandmtrade

Newbie
4 0
Hey guys, I'm new to this forum site but not to the markets. Anyways, I prefer using mainly technical analysis to evaluate my potential trades. I have a smaller account, but I am trying to grow it rapidly. I mainly use FullStochastics (14,3,3), MACD (6,9,3), and (12,26,9) for my indicators. If you guys have any cool resources to learn to use these indicators better I would really appreciate it. Also, I will throw up some of my analysis from time to time to see what everyone has for input. Can't wait to start learning!
 

PieterSteidelmayer

Well-known member
283 54
Fair enough. I'll help you use those indicators better. Remove them.

MACD is just telling you which side of the mean the price is currently trading. You can either get that from slope or use a moving average if you really need it.

Stochs are based on a non-deterministic series of which any asset based prices series in not a member in that they are not random. What Lane was trying to do was express where the price is now in relation to its prior range. Something I refer to uncommitted range. If there's more top and/or tail then commitment (open/close) it's flaky, otherwise, it's committed.

You're looking for nice fat bars either topping out above the mean or bottoming out below the mean.
 

timsk

Legendary member
7,611 2,382
Hi Brandmtrade,
Welcome to T2W.

Indicators were all the rage a few years ago, but they are out of favour now - as evidenced by the reply from PS, above. That said, lots of traders still use them to some degree, although they tend to do so clandestinely!

The real issue with indicators, is not the tool itself, be it MACD, stochastics or anything else, it's the trader. Traders use and abuse indicators and then wonder why they 'don't work'. For more details on how to use them well, check out this sticky: Essentials Of Technical Analysis If you don't want to read the whole thing, scroll down to this heading: Indicators and the Mechanics of TA.

This article may also be of interest: The Stochastic Indicator: When it Works, When it Doesn’t & Why by Steve Palmquist. It was much slated at the time it was published and, to be fair, those doing so do make some interesting points. The bottom line is that if indicators work for you, as evidenced by a your PnL, then stick with 'em would be my advice. If your results aren't what you want or hope for, is it because you're not using the indicators correctly, or not using the information they impart wisely? Neither of which are the fault of the indicator - its your fault!

One thing is for sure, tweaking the settings an any one indicator is highly unlikely to be the solution that enables a trader to magically traverse the divide from making a loss to making a profit. It's not like a combination lock to a safe - there are no settings that 'work' for all traders, just as there's no service style that works for all tennis players.
Tim.
 

brandmtrade

Newbie
4 0
Thanks for the input! I don't rely on my indicators too heavily and I know that they don't necessarily forecast anything. However, I have found them useful to predict viable candidates. For example, The FullStoch can give me a good idea on whether a stock could be exhausted or not and, in combination, the longer period MACD can tell me how strong the trend is in a trending stock. I then use the shorter term MACD to signal the small retracements within a trend channel. I haven't quite nailed buying and selling the small retracements, but in my head it works out. What I do rely on fairly heavily is support/resistance levels, trend lines, and candlestick charting. For me, these three aspects of a chart really help.
Hi Brandmtrade,
Welcome to T2W.

Indicators were all the rage a few years ago, but they are out of favour now - as evidenced by the reply from PS, above. That said, lots of traders still use them to some degree, although they tend to do so clandestinely!

The real issue with indicators, is not the tool itself, be it MACD, stochastics or anything else, it's the trader. Traders use and abuse indicators and then wonder why they 'don't work'. For more details on how to use them well, check out this sticky: Essentials Of Technical Analysis If you don't want to read the whole thing, scroll down to this heading: Indicators and the Mechanics of TA.

This article may also be of interest: The Stochastic Indicator: When it Works, When it Doesn’t & Why by Steve Palmquist. It was much slated at the time it was published and, to be fair, those doing so do make some interesting points. The bottom line is that if indicators work for you, as evidenced by a your PnL, then stick with 'em would be my advice. If your results aren't what you want or hope for, is it because you're not using the indicators correctly, or not using the information they impart wisely? Neither of which are the fault of the indicator - its your fault!

One thing is for sure, tweaking the settings an any one indicator is highly unlikely to be the solution that enables a trader to magically traverse the divide from making a loss to making a profit. It's not like a combination lock to a safe - there are no settings that 'work' for all traders, just as there's no service style that works for all tennis players.
Tim.
 

brandmtrade

Newbie
4 0
I see what you're saying. I don't use these indicators to decide a trade for me, but they have proven to be useful to find changes in momentum and strength of trend.

Fair enough. I'll help you use those indicators better. Remove them.

MACD is just telling you which side of the mean the price is currently trading. You can either get that from slope or use a moving average if you really need it.

Stochs are based on a non-deterministic series of which any asset based prices series in not a member in that they are not random. What Lane was trying to do was express where the price is now in relation to its prior range. Something I refer to uncommitted range. If there's more top and/or tail then commitment (open/close) it's flaky, otherwise, it's committed.

You're looking for nice fat bars either topping out above the mean or bottoming out below the mean.
 
 
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