J_Commisso, It's not that TA is trash -- I think TA has its time and place with certain trading styles (swing trading, swing option trading, etc). However, most traders who trade real-time as daytraders -- especially ones who are just starting out (like me with ES futures), will probably do better just watching the chart and ticker. I've read just about everything concerning TA and I must admit that 90% of the indicators are pretty lame. There is an indicator that tells you how fast the price is increasing or decreasing -- well no shit, you can see that on the chart. There is another indicator that tells you about the money index -- yeah right -- give me a break. Most of the indicators tell you things that the chart probably already told you, which makes matters even worse. Why would any trader who is just starting out spend more time learning about indicators than learning about pure market dynamics? That is akin to me learning how to use an onboard navigation system for a Lexus without ever learning how to drive the car. What in the hell good would it do if I knew how to use every gadget inside the vehicle if I didn't know how to drive it down the road? However, if I've been driving for awhile, then I might check out the onboard navigation system and see if it helps make my life easier. Then there is the major problem that a lot of people will use a lot of indicators at once. If you are a big fan of stochastics or MA's and that's just you, fine -- but what about these guys who have Bollinger Bands, RSI, MACD, Money Index, Stochastics, volume, etc? Then they're going to freak out when three of them are giving a signal to go in, two are saying not to and they are just sitting on their asses wondering what to do. Worse, if they are already in a trade and some serious price action occurs, why would they be looking at five indicators when they should be looking at the tape?! I can speak from first hand experience. When I first started to learn about TA, I absolutely loved it. I thought I could stick 5 of my favorite indicators together like a high-tech lego system and just pump out great trades with them. I found out over time that the only thing I was doing was trying really hard to keep up with 7 different things at once when 5 of them were just rearranging information that the 2 most important indicators were already showing -- price and volume. However, if you're already trading and making money off various indicators, why would anyone change? It isn't like Joey is making 1k a day, sees a message on a message board that says TA sucks and suddenly decide, "Gee I guess I'll change my style because someone said TA sucks." Hey, if it works for some people, great -- but at the very best, it would just give me a major headache at the end of the day and, at the very worst, it would probably severely decrease my overall performance.
jcom, you mean absolutley everybody? Or just everybody in general? Is the fact that on this board everybody always talks in such absolute terms an irrefutable law?
proftseer, Point taken profit, I retract the above statement and substitute most Of course you are brilliant enough to point out the glaring contradiction in my words, but why not focus your energy on the actual point of the post instead of ------> the limited use of words??? This is after all a trading site and not a crash course on self-inferential statements... PEACE and good trading, Commisso Disclaimor-----> Every post I make to Elite are lies!!!
you tell em hardcash, we'll load our charts up with indicators if we feel like it, and we don't need to use other traders opinions as indicators to tell us our indicators are or aren't working. My favorite indicator is the TWII. When it is high or rising, it is always an easy time to make money in the market. When it is low or falling, you are better off staying out of the market. (TWII is the traders without indicators index. It measures the success rate of traders who trade without indicators.) Hey toronto, Now a REAL Master can trade with indicators only, no price on the chart. And when you finally make it to the SUPREME TRADER level, you just blindly enter orders without even checking the price or fill price or profit and loss or even ever open an account statement. I have been trading at the Supreme Level now for years. As a matter of fact, I don't even know if the account I am trading in is still open. (I got some mail from the broker a couple of years ago, but I'm afraid if I open it, it might indicate something, and my mastery of the market is so fragile that I must exclude ALL indicators from my life to maintain my perfect intuition. I tell ya, it aint easy being a Supreme Trading Master. I could go into a major drawdown at anytime if I just accidently look at a thermometer!)
there is no absolute. there are many ways and many different traders and traders groups. indeed, on ET each group, one after the other, does treat the business as if it is only made of people like them. OK, this thread is for you then : discretionnary traders without indicators. Good. I totally agree that beginning traders should watch the market without indicators. a chart (or summary of important levels) and that's all. and you know what, a tick chart if possible. later, it's possible to select what you want to use extra, because the experience will tell you what does help YOU and what does not. and that's pretty personal. it depends on the method and your psychology. non discretionnary traders would have to smile reading this thread though. but we don't know better and don't make money, right ? tntneo
Here is a thought from another experienced trader... I personally know traders that have made millions using indicators only, I know traders that have made millions only using price and volume action, I know traders that have made millions and never even looked at a chart. What do they all have in common besides that they each used different strategies.. their discipline and psychology. As for personal preference.. as I laid out my case in Bronk's journal to me its all about having a set plan, following the plan, and focusing on the exit. --MIKE
To those who took offense to my suggestion. First off, I don't understand why they are angry at me for suggesting that struggling traders concentrate on price action, rather then be bogged down with TA. I can only speak from my experience, and that is TA has and always will be a lagging indicator. TA will never tell you what you can discern for yourself through price action and dynamic of the market. It hamper one's ability to quickly assess the market, and to quickly make an entry. The more variables the mind has to deal with, the less it can compute efficiently. In trading I find less to be better. So are there traders that make consistent profit using TA? I do not know, I can only speak from my experience. The day I got rid of my TA was the day I finally turned the corner.
this thread is about trading without indicators. not about 'indicators vs no indicators'. that's what some pointed out, including myself and there are great posts in here. but maybe you are like me, fed up with threads always quickly turning into a battlefield with one camp against the other instead of focusing on the issue. let me say it another way. trading without indicators has benefit of its own. no need to trash use of indicators because it did not work for you. and don't get me wrong, I do market making like operations and use no indicator (or very few, there is a bb there, but I don't really use it, I see it in my head anyway). and trading indices the system trading ops, we do use indicators and software. that's why I usually react when one says 'that's the way'. because that's not true. I follow several operations with very different methods. so saying it can't be done brings me a smile that's all. and furthermore, I agree, the more discretionnary you are, the less indicators you may find useful. and indeed, most popular indicators are lagging somehow. but that too is not necessarly bad but in very short term trading of course. there is a resolution too small to add 90% of indicators.. however, it depends what you call an indicator : pivots, high/low can be computed as indicators. so why not continue this thread focusing on benefits and how you do it without indicators instead of bashing too much indicators.. that's my opinion. others agree, maybe you disagree. it's OK. we are talking and that's fine. tntneo
By far, the best advantage that indicators provide is something to blame a bad trade on. It's not my fault, the indicator said so-and so. So long as traders,, or should I say would-be traders hide from the truth of the market, indicators will be popular.