Do We Need Indicators? Or does price already show us everything we need to know? https://dl.dropboxusercontent.com/u/143105519/Indicator%202.... On this chart: Keltner bands, Wave Volume, Volume, MACD. Consider price structure and MACD A to B. Looking at price, at A there is a breakdown from a top consolidation, a H&S, then from A to B a nice, steady downtrend. Drilling in on the MACD, from A to C it is sharply down to significant lows, confirmation; from C to D MACD remains below the 0-line but is mostly flat, divergence. Now, considering price, we can see the same momentum structure from which the MACD is calculated: From A to C there are much wider spreads down overall than from C to D and A/C goes much deeper in the channel (trend) than does C/D, a more shallow swing that stays in the upper-channel on those narrow spreads. MACD is, here, in a sense, redundant. From D to B, another nice price downswing, MACD remains pretty much flat with a very slight downward bias, a divergence. Which can also be seen clearly in the price action: From D and at E are deep reactions (in context) up, affecting downward momentum; then at B a wide spread with a long lower tail closing nearer the high. Note again here how the downtrend stays in the upper-half of the channel from C-ish to B. But I still like MACD on this setting, because it shows me an overall glimpse of what price is doing piece-by-piece. In a sense, it's redundant, but from another perspective, it shows the obvious more obviously. Now consider Wave Volume. C/D we see high, possibly climatic swing volume, however note, again, the relatively narrow spreads. There is no climatic price action, bar-wise. But, interestingly, D/B there is higher individual volume while wave volume declines. So I think Wave Volume is unique and useful as an indicator, at least vs individual volume. Price does indeed move in waves and this indicator may show us something about the force of the move that may be not evident in price action or corresponding bar volume. Keltner Bands. Looking at the A/B downtrend consider the bands vs the drawn channel, which is initially drawn A/F/G. Note how accurate the channel is, with price staying (almost every close) in the parallel upper-channel from G-ish to the breakout following B, that low at major long-term S/R (purple line) and the close sitting on that mid-line. The trend channel shows strength in the weakness of the downtrend. Conversely, the Keltner Band shows another scenario - weakness in the weakness - as price rides the lower half of the band with resistance at the middle MA, confirming the downtrend. B springs the outer-band. So I think the Keltner Bands may be useful as they give a perspective that may not show up through drawn channels alone. (Possibly this is simply because it's a longer timeframe?) I'm not sure yet.
I use indicators to determine when and where indicator users are about to puke their positions at market. The rest I leave to your research and/or imagination.
Clever, but this ignores the validity of my price structure analyses. I don't much care if you're making money off of me, I'm sure a lot folks are, I only care that I'm making money.
if indicators dont measure something tangible they R nothing but pretty . extremes are where the best edges lie
I don't even know what that means. What's "tangible", in this context? (Or is just another way of saying "worthwhile", in which case the argument's circular because you're saying they're worthwhile only if they're worthwhile?). Some do; some don't. Personally I no longer use them, and started becoming steadily profitable only when I abandoned them, about 5 years ago. But there are undeniably others using them cleverly, depending on them, and knowing exactly what they're doing with them, some of whom have been making a living this way for far longer than I have.
Interesting . I also quit using them around 5 years ago, and results improved. I still use them on one chart, my equity curve. There they give me a lot of clear Indications : Your in the flow, stop trading you idiot, size up, size down, pull away - your spinning your wheels, Stick with what your doing, Your out of touch ( Don't stick with what your doing ) .... and plenty more.
I just use SMA's in the attempt to follow the recent past and MAE's to give me a understanding of range, play the range with direction KISS!! MACD's RSI's Divergence LOL LOL are all completely useless. BB's are pretty clever and pretty good, just phased them out again recently, they create good setups and also good false hope, tricky!