Technical Indicators Categorization

[elmagd2000]

I believe this topic as it is of much interest to me it is of same value to many fellow traders.
When you analyze any market, you are supposedly trying to catch the whole picture or watching all sides of cube in order to reach a better decision. Even in any trading system. Robustness of a system depends enormously on measuring 4 items:

1- Trend : to indicate direction of trend.
2- Momentum : to measure the speed at which price is changing.
3- Volume : to confirm the strength of trend.
4- Volatility : to confirm price behavior.

Neglecting any item may affect system's performance. On the other hand, some indicators measures 2 items.

Examples of each category indicators:

1- Trend indicators:
Most trend indicators lose money during a ranging market as fluctuations in a narrow price band tend to whipsaw traders in and out of their positions.

It is important to identify whether the market is trending or ranging and to employ indicators suited to the purpose: trend indicators for trending markets and the faster momentum indicators for ranging markets.

- Moving average
- Two Moving Averages
- Three Moving Averages

Moving Average Oscillator
- MACD
- MACD Histogram
- TRIX Indicator
- Smoothed Rate of Change

Moving Average - Overbought / Oversold
- Price Envelope
- Bollinger Bands
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2- Momentum Indicators:

Closing Price relative to previous Closing Price Momentum
- Rate of Change (Price)
- Smoothed Rate of Change
- Relative Strength Index
- TRIX Indicator

Closing Price relative to Range
- Stochastic
- Slow Stochastic
- Williams %R
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3- Volume indicators:

Volume Only
- Rate of Change (Volume)
- Volume Oscillator

Compares Closing Price and Volume
- On Balance Volume
- Price and Volume Trend
- Force Index

Compares Closing Price, Range and Volume
- Accumulation Distribution
- Chaikin Oscillator
- Money Flow Index
- Chaikin Money Flow

Compares Range and Volume
- Ease of Movement
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4- Volatility indicators:

Based on Daily Range (High - Low)
- Chaikin Volatility
- Volatility Ratio
- Average True Range

Price compared to Moving Average
- Volatility
- Bollinger Bands
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Hope this to be of use. Pls. share your ideas.
reference:Incredible charts



__________________
Hani

 

[TheBramble]

Hani, welcome to t2w and very useful first post.

I assume you trade some or all of these inds yourself.

Which parameters do you use for those that take variables? And why have you chosen them if they are different to the default values?

What markets apart from FX do you trade?

And if you're into US Stocks - do you trade LII as well?

If you are just an FX trader - what proxy do you use for your volume-based inds?

 

[elmagd2000]

Thanks Tony, I am an memeber in other forums but wasn't showing activity Here. I thought this categorization is of use to all traders whatever markets they are trading and can help in understanding how to build a system.

Parametes are trader's preferences issue. I like MACD with default settings but many others say it causes too much lag.

I am trading both forex and futures markets with more focus on forex. I am aware of stocks and LII charts but didn't practice them.

Pls. share your ideas to initiate a constructive thread about buiding a perfect system.

Hani

 

[samuelhogg]

1- Trend indicators:
Most trend indicators lose money during a ranging market as fluctuations in a narrow price band tend to whipsaw traders in and out of their positions.

It is important to identify whether the market is trending or ranging and to employ indicators suited to the purpose: trend indicators for trending markets and the faster momentum indicators for ranging markets.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

What is the most popular method on determining if the market is trending or ranging?

Samuel

 

[TopIQ]

the best daytrading systems use a breakout with countertrend model usually trading a maximum of twice a day.

Two of the best systems to date trade EURODOLLAR (+700%) and COFFEE(+400).

 

[Kaffee]

the best daytrading systems use a breakout with countertrend model usually trading a maximum of twice a day.

Two of the best systems to date trade EURODOLLAR (+700%) and COFFEE(+400).

Agree with the maximum of twice a day rule.

+700% ?? Over what time frame is that then ?

 

[danielcrown]

like 2 meet you plz

hi,like 2 meet you plz. am Daniel from Nigeria. my phone no is +2348053785456