PPO is the best indicator because: 1. It is useful for two time frames, long and short, by observing both signal line crossings and zero crossings. 2. It can be adjusted well to different smoothing factors and different cycles for the market chosen. The default settings are too slow: try 6, 13, 9. 3. The case where the fast average is 1 has special properties: a. It is the best and most accurate velocity indicator. Velocity channels and turns before price. b. It shows overbought/oversold points at multiple levels that can be observed in percent above or below the average where the stock is trading. This often indicates tops and bottoms. c. It gives the fastest confirmation of a turn. d. My favorite settings are 1, 20, 6 on daily and 1,7, 6 on weekly charts. The zero crossing of the 1, 10, 2 is good for finding the end of a bear wave.
The best indicator is your track record... If you can hv 30% growth every yr for last 50 yrs with very little drawdown then what else indicator can be better??? Hope some of those masters can disclose their view and let me plot their positions RT on my eSignal/TS charts. Then I can forget all the other indicators such as MACD, RSI, MA, etc....
All indicators are usefull. It is more important to know how and when to use them. This only comes from experiences and research. .
Hi! My name is Ray. I chose this handle yesterday when I got on Elete Trader because I like all indicators and technical analysis. (All-TA-Ray) Kind of corny tho. You are right that there are people making money on just about every indicator. They all work. But they are only part of the picture of what it takes to be a successful trader. Once you have a system or indicator that works, then you need also the discipline and self-control to avoid the pitfalls of trader psychology, and a good, professional money management strategy to succeed as a trader. I started trading mutual funds in 1983, and made over 40%/year on them in '86 and '87 by simply plotting point and figure charts. It enabled me to avoid the crash of 87 and call the bottom of the bear in the DJIA on crash day. Since then, I've learned and used almost all TA methods, and found them all helpful. Every chart or indicator I look at tells me something useful. Thirty percent per year is ok for mutual funds, but too low for a real stock trader. I know people who are making that much per month.
Would it be possible to trade with no indicator and just trade by what you see forming on a 1 minute and 5 minute candle chart.
YES, but you would need to first have a mental system imprinted in the noodles upstairs..................
I think there are many good indicators but none should stand alone , they should be accompanied by at least volume and one other to confirm. Also getting acquainted with an indicator is absolutely necessary to get decent returns- but if I had to choose one it would be a moving average of some kind- but one indicator is too risky - you want many to confirm the others.
As you add to your checklist your risk diminishes, but your reward diminishes too because your entries get delayed, and your exits get pulled in. In my opinion the best tradeoff is closer to simplicity: a setup with only a few elements, but elements that you really understand and trust.
I read portions of Quantitative Trading Strategies by Lars Kestner where he backtests all the popular TA signals like RSI, STochs, MACD, BOllingers etc etc....over the past 20 years on the S&p 500 futures contracts....NONE of them gave positive results aside for the MACD and some other combination of indicators which were too complicated for me to understand.