FTSE Index best technical indicators

[ajnath]

I would like to hear from the experienced traders on what they have found to be the better technical indicators (RSI MACD) to use on the FTSE index.

I'm hoping some experienced views can give directions in terms of which one they feel are effective so that less experienced people like me can go and investigate further

thanks

 

[rossored]

AJ

You'll open up a can of worms with this. People like me will say that you're better off not using indicators at all, and your time would be better spent learning about price action than which indicicator is most effective (none of them work imo).

Others will say that MACD/RSI/Williams with a setting of abc123 is the most effective over a 7-minute timescale blah blah blah

The best way for you to find out for sure is run some trades - real or paper - monitor your results closely, record them, and find out which technique suits you best.

All my humble opinion of course.

 

[techtrader]

I would like to hear from the experienced traders on what they have found to be the better technical indicators (RSI MACD) to use on the FTSE index.

I'm hoping some experienced views can give directions in terms of which one they feel are effective so that less experienced people like me can go and investigate further

thanks

Aj
different indicators work in different market conditions and like all things are an indication of what may happen in the future by working out what happened in the past. I like a lot of other traders often use indicators that seem to work well in certain market conditions to help confirm an entry / exit strategy, but only after looking at the chart and deciding if the trade looks worthwhile.
To me risk / reward, support and resistance and common sense are key.
Decide what type of trading you want to do and hunt through these threads to help you to get a strategy.
Look at longer time frames, the markets have a good memory and S/R can go back many years, even if you are trading short term you may not realise that you may me hitting a long term resistance barrier.
Indicators are fine for confirmation but use what you see happening on the chart as your main guide.

All above IMHO

Send me a private message if it helps.

Regards
Dave

 

[Mornington Crescent]

imo there are no "best" indicators other than the ones which match your trading style.

I would suggest using 2 indicators which do not have a common base.

no point having different indicators which tell you the same thing ?

 

[splasher]

Agree thjat indicators should be used to confirm what you see according to your own rules/trading style. Only started looking at them recently because i assume the rest of the market does.................
Which 2 indicators are most indices traders watching out of interest?

 

[rossored]

Only started looking at them recently because i assume the rest of the market does.................

Yeah, the rest of the market does, alright. The professionals look at the "indicators", know what the buying public will do, and then trade the other way with huge size...

 

[Mornington Crescent]

lol

that would still make indicators very useful if it was true

but it isnt and I dont recommend trading with the indicators upside down.................

 

[GruntnoWay]

does any body know about a indicator called MFI - not the kitchen people. Market falicitation index I think is the name. I met a guy a week ago that swears by it but i lost his e-mail address.

 

[culion]

does any body know about a indicator called MFI - not the kitchen people. Market falicitation index I think is the name. I met a guy a week ago that swears by it but i lost his e-mail address.

Yes, that's the name from Bill Williams, I believe. It is simply range/volume. For volume and MFI directions: up-up = confirmation of direction, down-down = false move - no trade, down-up = enter with caution, up-down = end of old trend and potential new trend.

 

[peterpr]

IMHO - Pretty well ALL 'indicators' are useless unless you understand EXACTLY what youe are looking at. In other words, to rely to heavily on one indicator crossing or correlating or whatever with another as an auto buy or sell signal is a sure road to a short trading life.

There is potentially useful information contained in most indicators (or they simply wouldn't exist at all) but interpretation based on experience (usually of losing money!) is the key. Many make it easier to digest complex relationships at a glance - but you have to have real insight into the significance of the relationship for it to be of any real use. For example simple moving averages give you an instantaneous view of trends and - as they say - the trend is your friend.

But there really is no substitute for long hours watching how an index moves and relating it to all you know about volumes traded and market sentiment. The market is almost infinitely complex and apart from obvious herd instinct movers (which certain indicators - particularly volume related -claim to predict) is therefore not susceptible to a set of simple rules other than those you may develop for yourself over time.

 

[theknifemac]

does any body know about a indicator called MFI - not the kitchen people. Market falicitation index I think is the name. I met a guy a week ago that swears by it but i lost his e-mail address.

Hi Grunt

I think its actually called Money Flow Index and it is based around the "typical price" and volume. First calculate the typical price which is the average of the high, low and close for each bar. Then for each bar, if the typical price is higher than the previous bars typical price, the positive money flow for today is calculated as this bars typical price * this bars volume. The negative money flow is set to zero for this bar. If the reverse is true (typical price this bar less than previous bar) then the positive money flow is set to zero and the negative money flow is the typical price times volume.

The positive and negative money flow series are then smoothed over a number of bars (the only parameter to the MFI) and then the MFI is calculated as 100 - (100 / (1 + smoothedP / smoothedN))

Hope that helps

Stew

 

[techtrader]

Stew
We have a MFI in colchester as an indicator its pretty good at taking my money lol.
Understanding the Bulls and the Bears is what its all about, and making decisions on what you see on the chart and not via a third party.

Right back to building my walk in wardrobe........I will be using B and Q

Regards
Dave

 

[theknifemac]

Stew
We have a MFI in colchester as an indicator its pretty good at taking my money lol.
Understanding the Bulls and the Bears is what its all about, and making decisions on what you see on the chart and not via a third party.

Right back to building my walk in wardrobe........I will be using B and Q

Regards
Dave

Ahh the old MFI/B&Q switch, always a favourite. Value plays like MFI and B&Q are all well and good, its when you get into higher priced stocks like Danske over at Lakeside that you can get yourself into all sorts of trouble !

Stew

 

[techtrader]

Stew
A quick tip, try using the Danske movement ADXR in conjunction with a price channel as a smoothing indicator for the lakeside. If all else fails you could use the diabolical SAR
I am glad to see this BB is being taken seriously for a change.

Regards
Dave