Most introductions I've seen to TIs say "when the indicator does x, buy. When the indicator does y, sell." We all know that doesn't work profitably over time or everyone would only use one indicator and it would be called the Holy Grail indicator.
I've also seen websites that say to look for confirming indicators. They say like "when indicators x, y, and z give a buy signal, buy." That sounds like a better idea, however, it also seems like it might ruin your timing sometimes. For example, "cool, indicator x just gave a buy signal... now I just have to wait for two more... sweet, there's y... one more..." and then as soon as z gives a buy signal, the moment has passed.
I've never seen anything about using a conditional system, however (altho I'm sure something exists because I doubt I'm the first person to think of it). So something like "if indicator x gives a buy signal, and these other conditions with other indicators are met (not necessarily buy signals), then buy." So you'd use one indicator that seems to give good signals for your main indicator, like MACD. But as stated in the first paragraph, one indicator is never consistently profitable by itself, so you assign conditions to it. "Buy when MACD turns positive if these other conditions are met. If MACD turns positive and the other conditions are not met, do not buy." So it's like a filter for MACD (or whatever main indicator you are using).
Discuss.
I've also seen websites that say to look for confirming indicators. They say like "when indicators x, y, and z give a buy signal, buy." That sounds like a better idea, however, it also seems like it might ruin your timing sometimes. For example, "cool, indicator x just gave a buy signal... now I just have to wait for two more... sweet, there's y... one more..." and then as soon as z gives a buy signal, the moment has passed.
I've never seen anything about using a conditional system, however (altho I'm sure something exists because I doubt I'm the first person to think of it). So something like "if indicator x gives a buy signal, and these other conditions with other indicators are met (not necessarily buy signals), then buy." So you'd use one indicator that seems to give good signals for your main indicator, like MACD. But as stated in the first paragraph, one indicator is never consistently profitable by itself, so you assign conditions to it. "Buy when MACD turns positive if these other conditions are met. If MACD turns positive and the other conditions are not met, do not buy." So it's like a filter for MACD (or whatever main indicator you are using).
Discuss.
