Thats where we are different. I dont believe reading will help me. Ive read a lot of different books on trading, read countless online articles, watched youtube until my eyes went square and you want to know something? I dont remember a damn thing. What has stuck though are the lessons I taught myself through the many many mistakes I have made. I remember those because they hurt so much. Not to be an utter nob and come across as being arrogant and dismissive, I must admit that there were 2 books and one trade methodology stood out for me: Mark Douglas - Trading in the zone (gave me so much confidence I actually lost money being cocky) Adam Grimes - The art and science of technical analysis (His stuff is real good I just dont like his use of indicators) Wyckoff VSA - I dont agree with the volume analysis portion but the explanation of price movement is invaluable imo. Absolute gold, it explains why the market moves like it does.
What I use on my charts: Alligator Awesome Oscillator Candlesticks Moving Average, Simple Donchian Channel MACD Oscillator I screen with: Barchart TrendSpotter Bollinger Bands Moving Average, Simple I realize that every indicator theoretically has a use or it shouldn’t still be around, but… What can these do that my indicators can’t do? Aroon Oscillator Aroon Up/Down Average Directional Index Average True Range Chaikin Oscillator Commodity Channel Index Elder Ray (Bear & Bull Power) Ichimoku Kinko Hyo Keltner Channel Parabolic SAR Percent R Pivot Points Relative Strength Index Stochastic, Fast Stochastic, Slow Stochastic, RSI TRIX (Triple Exponential)
Question for those knocking MACD...granted it does not work well in a ranging market but I only look for trends that have started or are continuing. If you look at the up turn in XLE in late Aug or the last 3 trend changes in XLY I traded ATM options profitably off the MACD signal....why such hate on the signal if used in the proper context, trend change. What am I missing ?
I suppose it matters what you use the indicators for. MACD: look for divergence in the indicator versus price. Bollinger bands: I have never heard of anyone who uses BB and makes money The others listed: not so much Personally, I use MACD and RSI but look for divergences in price vs the indicator. It helps me find tops and bottoms. I have a couple of moving averages and I use pivot points. Then I look for supply and demand levels. When all of these guys line up, I have a trade.
Most small traders believe in the self-fulfilling nature of others, not them, using indicators. How many hundreds of friggen indicators are there in use today lol. Yet most small traders lose. Another belief most small traders have is the big traders are picking them off watching said indicators. Hysterical.
What you say makes sense, of course. I strongly suspect that what you're "missing", if anything, is ... (a) the fact that the typical aspiring trader's experience with MACD is unsuccessful and that partly explains its "bad rep" (granted, the same is true of many other indicators, too, but that's not the point); and ... (b) the fact that MACD is really terribly easy for the neophyte to misuse atrociously, use without understanding clearly (let's be honest: understanding it isn't trivially easy to do, as indicators go), and/or try to use it with wildly inappropriate settings for what they're actually trying to use it for (which they can very easily end up doing, especially if they make the mistake of following widespread forum and/or Youtube "advice"!). Indeed. But many/most people don't use it that way, often because they don't really know how to, partly because they've been exposed to misinformation about it, as mentioned above. I have. But only one person I know, myself (she's an ex-institutional trader who strongly prefers BB to Keltner Channels and uses them daily and successfully as part of her trading methods, and with settings which would surprise most people) - I never got anywhere with them, myself, even after a lot of study and experimentation.
That fact. without a doubt, would certainly apply to all worthwhile forms of TA, wouldn't it? Lack of sufficient study resulting in misuse, or even diligent study based on inadequate teachings, and the like result in the same 'bad rep' for TA as a whole that you mentioned for MACD.
I find the MACD histogram to be a reliable instrument to help you fly/trade better. Best uses-trend capitulations, double tops and bottoms in range days, pullbacks in trend days.