what indicators do you use?

Discussion in 'Technical Analysis' started by maximillion, Oct 11, 2009.

  1. volume with support and resistance lines
     
    #11     Oct 12, 2009
  2. Using classical indicators is of little value. That is what every newbie tries. You will not find a lot of experienced traders depending on an RSI, MACD or similar to DELIVER profits longterm. Used to confirm, maybe.

    The most successful people here (based on their discussions) usually depend on:

    -- price action (but takes a long time to master, if the many testimonies here are to be believed))
    -- good tech setup such as multiple monitors, backup internet, really good brokers (best if 2+)
    -- discipline and patience
    -- top-notch money / position management
    -- trading capital preservation
    -- understanding the statistics (such as Profit Factor, Sharpe/Sortino ratio, drawdown analysis, etc.)
    -- proper, not overleverage
    -- a lot of research learning abut trading, the laws, the tax issues and other similars.
    -- volume? seems rather questionable
     
    #12     Oct 12, 2009
  3. :cool:
     
    #13     Oct 12, 2009
  4. Price and Volume play big role.
    I will try to pay more attention to those steps. thanks
     
    #14     Oct 12, 2009
  5. Redneck

    Redneck

    TZ :)


    Max - fwiw Also add in price in multiple time frames


    RN
     
    #15     Oct 12, 2009
  6. Use price and volume. Develop watch list based on ATR also.
     
    #16     Oct 12, 2009
  7. Kap

    Kap

    I use to count the number of leaves on a group of local trees.. odd/even : long/short, but after rigourous backtesting and a lack of consistent historical data I moved onto Cloud formations, and havn't looked back since !

    Earl grey anyone >?
     
    #17     Oct 12, 2009
  8. Beginner level

    As you see there have been a million threads on this topic.

    I am attaching a chart that shows a blend of information.

    Here you see on a sort of holiday Bots going to work that are keyed to "trending".

    Today (the 12OCT09) several major events happened. Another long channel came to an end and it wil be regarded by pattern people (SEE TZ refutation by reference) as the second of two tops (double top). A double top of some slower fractals.

    The P, V relation shows as an outstanding indicator for these two illustrated trades (A third one is there too on the very right).

    Electronically a lot of coding is done to "KNOW" when a trend ends. BOT's, as you see, are using the Right Trend Line BreakOut (RTL BO) which is well after the second double top which the BOT's neglected.

    As you may or may not see a leading signal of this is provided on bar 52 by using indicators based on price only formulae. They yield signals when knowledgeable deploy them. TZ announced that unknowledgeable people are common and these things do not work for them. Most unknowledgeable people can't do anything they try. This is a truism.

    I chose opposite signals on the same bar colors to demonstrate the nuance aspect of trading with indicators. The profit on the trading turns is 5 points and 3 points of the signals are taken when they appear. Assume you are trading 20 to 50 contracts as red neck does. This is a profit of 20K at the upper contract end.

    With three formulae type indicators, you can see (some people will not see, google Bwolinsky) how they work singly and in combo to produce various kinds of signals for various levels (skill or ATS) of trading money velocities.

    Advanced Beginner

    Notice that volume has several relative characteristics and it has extreme values. A knowledgeable trader develops skills around these ideas. Such a person could annotate the envelope of price as well. By combining the two, the P, V relationship discovered as a theorem long long ago, comes into the picture for a learner.

    Also notice that indicators have two lines. When the fast line is to the left of the slow line, you are told which side of the market is the "RIGHT" side. Suppose you switch sides when the market tells you to. On the MACD you also get to see how the histogram tell you the same thing. This is type of indicator reading is an early bird orientation.

    Intermediate

    Here we use indicators and P and V as "leading" indicators of trades. You can probaly figure out that two lines have six different relationships*. With three indicators the number of combinations cannot be figured out by dumb people. Use these relationships to under stand the order in which they occur. If you smell smoke while figuring, rest a while, you may be overheating.

    Also look at the "zones" indicators occupy. the zones are "tells" from the market. Zones flow too, meaning they come in orders of events. Since they do, now you know the market "telegraphs ahead" its intensions.

    There's a lot more but I want to move up to expert for a moment.

    Expert

    Dumb people skip to expert right away and get screwed. It is not a good idea to read about experts if you are not intermediate. This is not Lake Wobegone.

    As an expert sees, there are seven trades on the chart. All are telegraphed by the market. The horizotal lines are two point divisions and the bars are five minutes long. They all have to do with P and V. On the fast fractal trade the FTT's of the fast fractal containers. That is why some people who are experts settle for trading P and V without indicators.

    Say you set up an indicator for trading fast fractals. When you are in a trend and want to trade both the dominant and non dominant, you just use the indicator swings across the "overbought" (for longs) or underbought(for shorts).

    Here you also have a backup set of tools. You use the DOM walls, the S/S color and the 2 pair patterns on the OTR chart.

    Summary

    As you see trading is easy if you are knowledgeable and you have skills. Both are easily acquired by purposeful experience. At first, mostly everything is seemingly impossible. Usually it is because your screens are all screwed up with the wrong displays. Whe consequence of lousy displays is that everything is unbelievable and astonishing. Be a copy cat and get your screens set up. It will take more than one supplier since suppliers do not know about trading; they focus on sales instead. Then you need to add scripts to your screen panes. Then you need to annotate the scripted panes on your screens. At this point the market is visible and you can trust what the market "tells" and "telegraphs".

    Here is an example for two platforms: multicharts and trade navigator. Try putting a ray on the MACD max of the fast line. LOL If a person could do this, then he could see a reversal coming a mile away.

    Final question: how do indicators tell you the difference between when either a retrace or a reversal is beginning?

    * Use the name of the indicator to see the parts of the six patterns. Each pattern has three parts. Some patterns begin with one element; others begin with the other element. C is one and D is the other. What is in between? This is how you find the six triads. You only get to discover this once in your life. It is amazing how long ago the inventers discovered this and then named the indicators. They were not dummies. Which triads are signals? What is the name for the other ones?

    I know this is too long for a person to read all the way through. It is just too much to spend the time reading. Oh wow what a pain in the ......
     
    #18     Oct 12, 2009
  9. Price, Volume, and Market Internals. Oh and some S/R confluence areas.
     
    #19     Oct 12, 2009
  10. rickf

    rickf

    What you say may work for you, and if so, I applaud you for sharing your method....but to say with certainty that an expert will see such-and-such is, in my view, an incorrect conclusion.

    With respect, you may see seven clear trades on a chart, someone else may see 3, someone else might see 5, and someone else might see 1 or none at all. I look at your chart and think "too much information" and it's not a chart I would use. But that's just me, and I probably 'read' the markets differently than you, and vice-versa. That's how it should be!

    Each of us needs to be an "expert" in our own system/style/method/timeframe of trading -- what works comfortably for you may not work for me or someone else.

    The only things that make an 'expert' trader in my view are their ability to read the markets, execute controlled trades, and appropriately control risks once in a position. How they do that, and what tools/techniques they use, is entirely up to them -- they're neither right or wrong, just different.
     
    #20     Oct 12, 2009