TA Indicators

[fernanj]

What are the most reliable Indicators one should use in ones Technical Analaysis and which ones might be a waste of space. I happen to read a lot on TA Indicators but the more I read and use the more confusing it all gets.

many thanks (in advance) for all your feedback

Joe

 

[Bill G]

Joe
You have certainly posed THE question . What indicators have you been using? If you use too many you can get contradictory results as you obviously have found out.
Ok here goes:- Direction Indicators- ADX on top of +DI & -DI
The ADX to tell if a stock is trading or trending,
The crossover of +DI & -DI.
e.g. +Di crossing up through -Di as a Buy signal, bearing in mind
to look at consecutive days, that the following day is higher before you commit yourself, as Wilder calls the `extreme point`
The opposite way for a Sell.
As a swing trader you willalready be familiar with pivot points.
That's it from me, I'm sure you will get a wealth of indicators which work for other people, and I suppose thats what you need to do.
I agree with you, you think "should I trust what this indicator is telling me."
If you need write ups on Direction Indicators i'll post them on the BB.
allthe best.

 

[fernanj]

Thanks Bill.. I think common sense still prevails in most case (with a pinch of decipline)!

 

[SOCRATES]

Wild Goose Chases

QUOTEwhich ones might be a waste of space. I happen to read a lot on TA Indicators but the more I read and use the more confusing it all getsUNQUOTE

All of them are a waste of space, read my posts, have realisations,
change yourselves and you will benefit greatly.

 

[BBB]

I find Bollinger Bands useful. I dont use them as trade signals, but to get a feel for whats up. A sort of health check if you like.

I have been told that institutional traders just use the SMA's (10 & 20).

I really wouldn't worry too much about analysis though. If I were you I'd focus on trading and making money. This is something few people tend to post about! Work on defining your edge, then exploiting it through trade management. This is probably why the 'pros' only use SMA's. They know analysis is more trouble than its worth, and trading correctly makes money, not calling the right direction.

 

[chump]

"What are the most reliable Indicators "

...training the indicator between your ears to recognise the opportunties that are worth applying your resources to and knowing how to avoid squandering your hard won gains on second rate opportunties..not a lot of help ?

 

[SOCRATES]

But they don't want to hear this, see it, or be told it.
It is as if there deafness where there is otherswise perfect hearing,
blindness where there is otherwise perfect vision,
and rejection where there is normally acceptance.

If it were not so funny it could be serious.

 

[GruntnoWay]

I have been using CCI recently with some success. I run it through and optimiser to tell the period and levels to use.

 

[trendie]

I have almost come full circle with indicators !!

I stared out learning and understanding what they are, when to use them, etc.
I then tried all manner of strategies to determine entry and exit points.

After all this, price action is by far the easiest, and purest form of indicator.
Sweep away all the lines and oscillators and gradients, and the truth is underneath it all, the price action itself.
I still am a relative novice, with 2 years trading indices EOD.
I still use SMAs, as a sort of "stabilisers" as I learn to ride this market.
( although I admit to a thing about swing-trading, with its pivot highs and retracements, etc )

Its scary, but the the simple truth is the price action tells it all.
Sometimes the answer is so simple, we cant accept its truth.
We feel it has to be more involved - so we create our own false reality of complexity - cos thats what we expect.

Hope the above makes sense !

 

[GruntnoWay]

thats a good message. You are right. The price tells all which is why I like point and figure charts.

 

[mr_cassandra]

One suggestion (actually two)

What are the most reliable Indicators one should use in ones Technical Analaysis and which ones might be a waste of space. I happen to read a lot on TA Indicators but the more I read and use the more confusing it all gets.

many thanks (in advance) for all your feedback

Joe

Many ta indicators actually look at the same thing thru slightly different lenses. Examples CCI, RSI and Stochastic.

This means if all 3 same the same thing, its really just one.

Better to read description and seek out indicators coming at the picture from very different angles. Suggestion RSI, ADX and a volume indicator.

Other perspectives could be the put call ratio, tick/trin

Again these latter ones are looking at different stuff, not all the same thing.

Last but not least, be aware of one serious drawback to most oscillators; which is their ‘fixed’ time frame. What I mean is, if you have a 12-26 macd on price of stock A, and stock A rises for 35 days, the macd will begin to tell you its running out of steam, but in reality, stock A has merely been rising beyond the time frame that the macd prefers.

MY own system uses, vix, put call and some mcllelan summations, and uses various features to cross check itself before issuing a signal.

 

[GruntnoWay]

i have been experimenting with point and figure charts of RSI and i think it makes them more readable. has any one else tried something similar or am i the only one

 

[gullible]

Being relatively new to trading a lot of terms do not make sense to me eg CCI. However, searching on the net I tumbled across 'original turtle rules'. I did not fully understand the rules, but applied them in their most simplest form. To date I have found these rules work more often than not. I have used 20 period ema and sma to either long or short. To my surprise this worked even on a intra day chart as provided by CMC. Last time i used it, down tried to break 20 period sma several times (on the same day), when it finally succeeded the price went down in a matter of minutes by 30-40 points and stayed there for quite a while, before resuming downward trend for the rest of the evening. From memory, by close the price was down by over 100 points.

I have also tried using support and resistance on S&P500 on a day when it seemed to be range bound. I must have made at least 10 points in total on several long and short trades.

My experience and knowledge stops here, as I threw caution to the winds, longed down and S&P, when moving averages were telling me a different story, did not worry about stop losses and I am now in deep negative territory! Learnt the hard way, always listen to what the market is telling you, even if it is only SMA and EMA.

 

[GirlPower]

My experience and knowledge stops here, as I threw caution to the winds, longed down and S&P, when moving averages were telling me a different story, did not worry about stop losses and I am now in deep negative territory! Learnt the hard way, always listen to what the market is telling you, even if it is only SMA and EMA.

Why did you do that? I haven't done this myself yet, but wonder what makes otherwise intelligent traders, with profitable systems and management, do what they know they shouldn't.

 

[gullible]

Why did you do that? I haven't done this myself yet, but wonder what makes otherwise intelligent traders, with profitable systems and management, do what they know they shouldn't.

Girlpower,

I still do not know but feel really stupid for doing it. I hate to admit it but after a few 'wins' caution and humbleness went out of the window.

 

[Glenn]

I agree with Trendie - indicators are no use.
You don't drive a car by looking in the rear-view mirror.

For Gullible, here's a link to some scenarios which may be familiar.
www.precisefutures.com/free_doc/doc_1.php
There is a commercial angle, but the free part is worth a read imho.
Glenn
Another Shropshire lad.

 

[sharriss]

Just like Trendie, I too have gone full circle with indicators.

I started by learning about every indicator there was, and then filtering down to a nice set of 5 that complimented each other quite well.

I slowly removed each of these until I now use price, BB, volume and SMA's.

I'm not saying that's right or wrong, but it works for me. It takes time and knowledge to find the right combination of data for you, and there will be some mistakes along the way. Learn to gain from them.

S

 

[cd173]

I've found that stochastics mixed with price action makes for some very good signals. I've also been round the block looking at every indicator, but now realise they are useless as they lag. Except for stochastics that is, but this indicator used on it's own IMHO would be very unwise.
Having said that, it's each to their own trading style!

C

 

[Beachie41]

Volume has figured greatly in discussions on the T2W forums, pertaining to trading naked or with minimal indicators. It has been presented as the main "clue" as to major market participants likely future moves.

But with Forex spot, as we all know, true volume is not possible, and if represented at all, it's usually only tick volume.

So, in the absence of volume, what methods have others found that reliably allow one to draw reasonable assumptions about what the major participants are doing?

I use P&F, S/R & patterns for setups, but being *consistently* profitable has proved elusive, as often I've misjudged the strength or weakness of a particular pair.

 

[dbphoenix]

I use P&F, S/R & patterns for setups, but being *consistently* profitable has proved elusive, as often I've misjudged the strength or weakness of a particular pair.

Why have you chosen P&F? And I assume the "patterns" you refer to are P&F patterns?