the reason indicators don't work isn't because they're lagging

Discussion in 'Technical Analysis' started by 1a2b3cppp, Jan 23, 2018.

  1. comagnum

    comagnum

    Agreed - not all indicators lag, that is if your platform updates the indicatoe on the current price bar. The real point I was trying to make is that volume (equities only) & momentum (not the indicator) are the only things that precedes price.

    Indicators report only what is or what has already happened - just like my speedometer reading 55mph only reported what was happening, it did not predict I would drive at 55mph . We both agree on that.
     
    #11     Jan 24, 2018
    Overnight likes this.
  2. Sprout

    Sprout

    True with any liquid market, especially index futures.
     
    #12     Jan 24, 2018
  3. Handle123

    Handle123

    98% of indicators lag and have zero predictive abilities by themselves, but more time of watching and comparing to price itself you learn what is normal and what is not, but let's be honest, Price lags as well, as soon as it happens, prints nano seconds on your PC, force of price continues faster with higher volume normally, and big bars often happen on lack of volume. Reading charts is an art form but becomes more science the more you back test and break down price into smaller and smaller pieces seeking re-occurring patterns. I prefer lagging indicators for intra-day trading as lagging for me misses false trades, but knowing where newbies are taking trades based on faster indicators, well.....sharks will be circling.

    Every three years on average, I venture into new paths within trading and just gone into cycles which I now believe to refine predictive abilities, but everything we put on trades, we are foretelling price to go into certain direction. If all we had to do was flip coins, we all be working on systems to do this, length of table, is the table on angle, clean coins...etc.....
     
    #13     Jan 24, 2018
    beginner66 likes this.
  4. Simples

    Simples

    Excellent engineers and scientists have a fighting chance though.
    Trading is very counter intuitive: You can do everything wrong naively, and still win. There's also a big differences trading entirely by discretion and mechanical trading.

    What it takes to get there though, very few get even a glimpse of. No guarantees to be obtained, always.
     
    #14     Jan 24, 2018
  5. simbaFX

    simbaFX

    Apart from vendors preying on the gullible, whoever said indicators were supposed to be predictive ?

    I'm not sure I even understand what you mean by 'work', how can they not work, they simply transform an input to an output
     
    #15     Jan 24, 2018
    bklrnr, lcranston, Simples and 2 others like this.
  6. qxr1011

    qxr1011

    very true
     
    #16     Jan 24, 2018
  7. qxr1011

    qxr1011

    if they would predict they would be called predictors

    indicators indicate

    for example adx is a trend strength indicator
     
    #17     Jan 24, 2018
    bklrnr, speedo and simbaFX like this.
  8. What you're really saying is that indicators don't work for YOU and that YOU haven't found any predictable value in using them.

    Most people are not able to predict based on price history alone either.

    An indicator is nothing more than an arithmetical calculation based on price history.
     
    #18     Jan 24, 2018
    Bigstuff likes this.
  9. tomorton

    tomorton


    Not in my experience. These are smart, experienced and well educated guys (sorry female traders, generalising, but the ratio of male:female in these sectors is maybe 20:1) but everything they have absorbed from infant school onwards makes for a bad preparation for trading. (same can be said for accountants, doctors and no doubt many more professionals who all make terrible traders.)

    At the very least, their prior experience convinces them that training and qualifications trump innate skills, that the successful guy (sorry again) is the one who makes fewest mistakes, that the best paid guy is the one who knows most, and that the happiest people are those who don't court conflict and failure. All this is true to a point but once the losing trades start to accumulate on the screen and the monthly gain is actually showing red and they have to make the next trade with incomplete data, they freeze, they crumble.
     
    #19     Jan 24, 2018
    comagnum and Arnie like this.
  10. Arnie

    Arnie

    ^^^^^
    Agree
    The qaunt types have trouble accepting the uncertainty that is inherent in trading.
     
    #20     Jan 24, 2018