Im using ADX indicator..Because it measures the strength of the trend and it indicates high readings as a strong trend and low readings as a weak trend.... tower light uk
I see there are some that share the notion that indicators of indicators is a no-win decreasing returns but try dropping the stochastic oscillator indicator on the Macd indicator. Surprisingly it is quicker than the Macd ! Perhaps there are some others too ?
Unless you have strict rules of how your indicators will be used, you are only making your job as a trader more difficult. I'm developing a second system that uses 4 indicators. Each one has 1 purpose, and one purpose only, that is applied to every trade. stochs with 34/10/10 settings macd 5 atr boll bands The reason I'm developing a second system is so that I have one thats better suited for day trading , as my first one requires too much analysis to make quick decisions. The guys that say they are price action only, I don't think are telling you the whole story. You think they read, and analyise every candle?..no. MOST of them, at least the ones I know, trade price using fibs. A lot of guys here on et hate them with a passion, mostly because they dont understand them. But in FX circles, fibs are followed like a damn religion, and are also very accurate. I love fibs, but my problem has always been timing...hence the indicators. Here is my 2 cents of advise to indicator traders: 1. Like I said above, every indicator should have a specific purpose for being on your charts that will be used on EVERY trade..what do I mean by this?. My stochastics is used to give me a buy or sell signal, however I use macd to confirm wether or not I should take it...if macd is red and stochs say "buy" i ignore. The boll bands are only there for me to calculate stop losses. Stops are at the low or high of the bands ( i dont use the 20sma), and the ATR is used to calculate targets. So you see, I cover all bases: entry, stops, and targets. Some thing needed on EVERY trade. 2. Have an indicator that confirms the signal indicator. Having a buy/sell signal isn't enough. A confirmation indicator is needed to help ignore the bad trades. DONT take buy/sell signals off your confirmation indicator unless this is part of your plan!. 3. Play with the values of the indicators. I find that a 34/10/10 stochastics works great for ME, but try other values to see what you like, and works for your system. I'll be nice and share my system with anyone interested, but its still very new. So do your own backtesting. KON
So your software is a type of market sonar? If I am understanding it the software takes non-correlated data from a variety of sources. Then, much like a sonar would, it transmits a topographical image of the targeted terrain, which in this case is EUR/JPY, correct? If so, interesting concept.
That's excellent as not all that many people do. I tried you approach years ago and it didn't work for me. So I went on to find one that did.
Back to basic indicators, another combination is to use the MACD(12,26,9) and a 12 period SMA. Trade using pin bars, hammers, price failures, whatever u call them in the direction of your now defined trend. Take your trade metrics from a volatility study.