Perhaps, but I have yet to hear or learn of any indicator based system that is profitable long term through all types of markets. Furthermore, automatic black/gray box type methods basically churn out very modest returns, sometimes just a few dollars per trade, usually have long periods of massive drawdown, and then eventially fail to work altogether in time. The issue I am bringing forth, and I went through much of the same scenario, is that most, if not all, retail traders begin by reading books based on indicators. They then get a charting package and begin trying to develop a trading style based on indicators. When one indicator fails to provide consistant profits, they add another indicator, until they have numerous conflicting squiggly lines stacked twenty deep, and still, no profitability. Then they delve into the world of optimization, and lo and behold, they see a tiny profit. That is, until market conditions change, and then they are right back to square one. In summary, the only indicator that is consistent day in and day out in all types of markets is price. That's not to say that an indicator can't be used in a minor role to support price, but in my humble opinion, price should be the only factor in regard to the setups of entries and exits. This conclusion comes after years of trial and error and many tens of thousands of dollars in "tuition." No offense intended for those who believe otherwise, key word being "believe." Logic and statistical evidence does not support the use of indicators as trade setups, optimized or not. Flail away!! st
An indicator that is periodically optimized compared to an automatically adapting indicator is equal to a standard gearbox with 1 shift versus an automatic gearbox. A standard gearbox with 1 shift can only be driven in that shift. If the road is very steep you need a short ratio because you need power to climb; if the road is flat you need a long ratio to drive fast. Each time the road changes you have to decide if you will stop, take out the gearbox, change the ratio and put the gearbox back. You will almost never have the optimal ratio in your gearbox, especially not if there is much variety in the roads you are driving on. If you think the road will be flat and you make a mistake, you will be forced to stop and change the ratio again. Each change is a gamble because you never know how the road will be 10 miles further away. My automatic gearbox is much better. It adapts itself automatically to the circumstances of the road. I donât have to stop and the change takes only a second. I donât even have to think about it, the gearbox will always choose the optimal gear to travel fast and comfortable. If the road is flat I will drive fast and when in the mountains the gearbox will automatically shift in a low gear. Whereas the gearbox with 1 shift always lags behind, the automatic gearbox will never lag because it constantly monitors the road and adapts itself to give optimal performance. I hope you understand what I mean. Indeed they both change, but in a completely differnt way.
The issue I am bringing forth, and I went through much of the same scenario, is that most, if not all, retail traders begin by reading books based on indicators. They then get a charting package and begin trying to develop a trading style based on indicators. When one indicator fails to provide consistant profits, they add another indicator, until they have numerous conflicting squiggly lines stacked twenty deep, and still, no profitability. Then they delve into the world of optimization, and lo and behold, they see a tiny profit. That is, until market conditions change, and then they are right back to square one. You will never find in books what works well and all the know indicators are worthless too. Millions of traders have tested all this garbage over and over again. So, the wrong way to start. You could as well buy a grey or balck box. In summary, the only indicator that is consistent day in and day out in all types of markets is price. That's not to say that an indicator can't be used in a minor role to support price, but in my humble opinion, price should be the only factor in regard to the setups of entries and exits. This conclusion comes after years of trial and error and many tens of thousands of dollars in "tuition." No offense intended for those who believe otherwise, key word being "believe." Logic and statistical evidence does not support the use of indicators as trade setups, optimized or not. This was your experience, mine was completely different. I survive as daytrader since 1990. I âm even able to make profit.
Very well stated. Monitoring markets by taking data sets in lieu of reacting to a single data element pints up how makrets are a composite of collective human behavior. One of the most impressive behavioral indications is monitoring data sets that occur prior to price gaps in order to know the gap is coming and its direction. Human behavior has many "tells" that are leading indicators of price. The tells before gaps are optimizable for many parameters.
It is sad to hear of your unforntunate experiences. Were I you I would stick with your viewpoint and not participate in trading. If you ever get a chance, attend a Trader's Expo and just compare those with whom you are familiar with those who represent "Great Traders you have never met" who appear on panels and discuss how to be very succesful. Don't change your views as a consequence. It is very important to not do any trading, however. The mind does not have an "erase" function. After reaching a certain point in accumulating what you did, it is impossible to supplement what you have in your mind with the sufficient quantity of information to overpower the collected evidience that you have. There are many many things beside trading.
ROFLMAO @ this blowhard!!!!! No doubt, I have become ET's flypaper for the severely clue deficient psychotic windbags. As for you 'jerk'-off ass clown, if you would learn to spell and punctuate beyond the second grade level of special ed, someone might take you just a tiny bit seriously, rather than seeing you for the no-account half-wit imbecilic mental midget you keep showing yourself to be. Now quit drooling all over your key board and climb back onto that special needs tricycle of yours. You know, the one with the fourth wheel attached for extra ensured retard stability, and then pedal your dumb ass back to the mental house you escaped from. Geez, if you can't read price on a damn chart, all you had to do was say so!! st