All indicators useless?

[bundlemaker]

Consider this: if you use any given indicator in the same way as everyone else does, you do NOT have an edge.

I have evolved from being infected with indacatoritis, to price/volume only, and recently adding a couple of indacators back into what I do.

For what it's worth, this is how I would approach it:

1) Learn to trade with price only, to really understand s/d relationships.


2) Find ways to fine tune what you do with an indacator or two. Make it your own by finding a new/different way to interpret it. Back to what I said to start with, you can't look at it the way everyone else does, or you have no edge.

 

[SimpleSimon]

Experienced traders with good working knowledge of the markets can go on to use trading sysyems built around technical indicators. Most important is their confidence in those indicators, and not to be redundant, that would only come from experience. Newer traders should focus their efforts on learning about support/resistance, expansion/contraction, and confirmation/failure. Eventually, if it their choosing, they can go on to become a systems trader using technical indicators built around their understanding of these concepts.

 

[Trader Pete]

very good point SS, systems trading is for those experienced traders who know how to be objective after years of development, or for the newbie that understands that this is where they will most likely end up (after 'discretionarily' losing money!).

Pete

 

[Magna]

Quote from bundlemaker:

Consider this: if you use any given indicator in the same way as everyone else does, you do NOT have an edge.

I agree, but that doesn't mean it isn't very useful to still watch indicators that everyone else is following (like the 50 or 200 period ma, fibs, etc.) The trick is not to use them like the herd....

 

[prox]

No, they're not useless if you know how to use them.


Problem with most traders is they hop from method to method, indicator to indicator and never really master any of them.

 

[bundlemaker]

Magna......

couldn't agree more. It's most useful to have an idea about what the majority is thinking.

 

[omcate]

Quote from indahook:

Did your trading improve when you started to rely solely on the probobilities of your strategy and risk management as opposed to technical indicators?

Yes. For the past five months, I have not been looking at any technical indicators at all. Just make sure that there are a lot of small winners and no big losers.

I ***THINK*** it all depends on your trading styles though. Just my two cents.

 

[spreadem]

Newer traders should focus their efforts on learning about support/resistance, expansion/contraction, and confirmation/failure.

Not only newer traders.

I watch price and price relationships mostly. When I use an indicator I only use three.

 

[indahook]

Great reponses..thank you. Lots of market savy individuals on ET.....

 

[TG]

Regarding ERTS, here is what I meant. I had alert set at yest high, 59.6, was on my watch list when that was hit. Ran right to 59.9 or so first 5 minutes on one candle, second candle stalled short of 60 resistance on lesser volume. third candle made no new high, became a short under low of second with a stop(under my system) if it cleared the whole number. I don't set targets, but pivot was 58.9. Became a second short on lower high of 12th candle. Same deal, looked to me like it could test pivot area again. That's my system for the early part of day, core of 8 stocks, works fine for me every day.