indicators that work

Mr Steve

Junior member
35 0
I just recently lost a lot of money on the symbol “ICE and BIDU” playing options.
I know a lot of indicators are lagers, but being new to getting in and out of the market I pay attention to Candlesticks and volume. Are there any good indicator settings for MACD or others indicators that could help.
And what are the best indicators and settings to use in swing and day trading.
I also pay attention to 15 and 30 and 240 minute charts. Is there any good silver bullets.

Thank you
Mr. Steve
 

rols

Experienced member
1,621 335
I know a lot of indicators are lagers.
Personally I don't drink and trade.

Is there any good silver bullets.
I thought Silver bullets were used to kill vampires and werewolves.

Seriously, trading options can be seriously bad for you and if you are having to be asking the above questions you may be better off trading something else.
 

yacarob1

Experienced member
1,471 181
Personally I don't drink and trade.
A lethal combination.

I usually breathalyse myself just before the market opens and if the crystals change colour I do not trade.

I just go to the pub and get even more p1ssed.
 

hwsteele

Experienced member
1,227 181
Just an idea but you might want to get good at paper trading before you risk any more money.
I learned that lesson the hard way myself. I don't use indicators now but when I did I LOVED the MACD. Divergence was what I looked for when using it. That is the only way I know of to use it to forecast. Every other way I know of to use it lags the market.
 

hwsteele

Experienced member
1,227 181
IBM.gif
Notice that the price and MACD are not doing the same thing. From pivot "1" to pivot "2" on the price chart the price gave a higher high, but "1" and "2" on the MACD was lower. That's what I mean by divergence.
When that happens the MACD is letting you know the price will most likely change direction.
Again notice that pivot "3" and "4" were higher bottoms on price but not on the MACD. This again let you know that price was most likely going to change direction.
The same with "5" and "6".
If you look at the price chart it happens again in September. If you look at the bigger swings over months you can see it again.

Hope this helps some.
 
Last edited:

pmn100

Junior member
19 2
View attachment 40240
Notice that the price and MACD are not doing the same thing. From pivot "1" to pivot "2" on the price chart the price gave a higher high, but "1" and "2" on the MACD was lower. That's what I mean by divergence.
When that happens the MACD is letting you know the price will most likely change direction.
Again notice that pivot "3" and "4" were higher bottoms on price but not on the MACD. This again let you know that price was most likely going to change direction.
The same with "5" and "6".
If you look at the price chart it happens again in September. If you look at the bigger swings over months you can see it again.

Hope this helps some.
The trouble with divergence is that it can appear much earlier than the reversal. Take the graph above, divergence appears on the peak before those numbers, if you shorted here, you would likely get stopped out. How do you know at what peak divergence will actually result in a reversal?
 

hwsteele

Experienced member
1,227 181
You have to watch price action.
i.e. In an uptrend start by looking for a new higher high in price but not MACD. After that look for reversal bars or candles. Also trendlines can help. Wait for price to break below the low of the last bar/candle. You can't use divergence as a stand alone signal and jump in as soon as you see it. You use it as an indication that price is getting ready to reverse. After that you have to watch the price.

Also notice I said that I don't use indicators any more. I believe that price will give all the information you need.
Some people are looking for something that tells them what to do and they believe that indicators will do that.
 
  • Like
Reactions: _JWG_

Mr Steve

Junior member
35 0
The more serious answers above were very useful, welcomed and I think all contributors for bringing attention to some of the things I have been overlooking. I have been using price and volume so much I have been overlooking the MACD divergence. Thanks for bringing it to my attention. Any other advice is very welcomed.
Mr. Steve
 

hwsteele

Experienced member
1,227 181
My only other advice at this time is if you choose to use indicators in trading never use more than two. That does not include moving averages. I wish you the best in all that you trade.
 

RichJM

Newbie
2 0
I just recently lost a lot of money on the symbol “ICE and BIDU” playing options.
I know a lot of indicators are lagers, but being new to getting in and out of the market I pay attention to Candlesticks and volume. Are there any good indicator settings for MACD or others indicators that could help.
And what are the best indicators and settings to use in swing and day trading.
I also pay attention to 15 and 30 and 240 minute charts. Is there any good silver bullets.

Thank you
Mr. Steve
Hi Steve use alligator and study it carefully.Alligator is very effective , it will eat all the bull and the bear easily mony making .If you use MACD try to use the divergence to indicate a reversal pattern. Its not always accurate but It will help you gauge when to enter and exit the market. My final advice is study the chart pattern as leading indicator.
Good luck
 

tomorton

Legendary member
7,458 1,010
Good advice hwsteele. Best to keep a trading system simple so that you don't tie yourself up in 'what-ifs?' when the real money goes in.

But in addition, one reason why many folks pile up a bank of indicators is that they think ther accuracy will compound. That is, if you have an indicator that is 70% accurate in signalling trades, then 30 out of 100 trades will be losers: some think that if you add a second indicator that is also 70% reliable, you would knock out 70% of the losers, so you end up with an overall success rate of 91%. Adding further indicators, by this logic, increases the win rate to a fantastic degree. This is all notionally true, so its a very seductive process, but in practice it is nonsense.
 

hwsteele

Experienced member
1,227 181
I believe you are correct about why people use allot of indicators. They think their odds will go up. Funny thing is it only hurts them. You go from the 70% back down to 50% really fast and sometimes lower! IMHO people would be better off trading without indicators.

But hey that's just me!:cheesy:
 

spy74

Active member
118 12
The more serious answers above were very useful, welcomed and I think all contributors for bringing attention to some of the things I have been overlooking. I have been using price and volume so much I have been overlooking the MACD divergence. Thanks for bringing it to my attention. Any other advice is very welcomed.
Mr. Steve
hihihi...i've found that indicators & oscillators are best used in the context of the bigger trend. indicators work best when u start by firstly checking out the trend on longer term charts (ie start with looking for direction of trend using an EMA on a half-hourly chart if the chart u like to trade is a 5 or 10min chart). from here, u only look for trades in the direction of the trend using an indicator (such as MACD) on your shorter term chart (5 or 10 min chart). i learned this principle from a book by Alexander Elder called Trading for a Living (book obviously give alot more detail). quite straight fwd, but helps identify good risk/reward trades!(y)
 

Similar threads


AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock