indicator showcase

I mainly use moving averages and volume, placing more emphasis on the former but always aware of the latter. Occasionally I will take a peek at an oscillator -- stochastics, rsi, cci, whatever the flavor du jour is -- but mostly dismiss it in realtime, although it always looks great after the fact. As to price I carefully watch highs/lows (what I call pivot points, not the calculated kind that have always been worthless to me), and of course patterns, patterns, patterns....

The secret's in there somewhere, I just know it. :D
 
price is the ultimate indicator.everything else is just a derivitive of price.
the usefullnes of any indicator is directly related to how many other people watch it.
 
Originally posted by darkhorse


========
baseless and useless: gann, elliott, fibonacci

too close to coinflip: stochastics, macd, RSI, ADX

(note: i reject oscillators largely because a trained eye does not need a filter to discern relative levels of strength or weakness.)

marginal but maybe: trendlines, pivot points, bollinger bands

valuable: moving averages, highs/lows, sup/rez, volume, volatility
=======
More...

For the most part I agree with darkhorse's list. I must admit I never really studied gann, elliot or fibonacci in depth, so I can't comment on them too much. What little I saw didn't appeal to me. There didn't seem to be any solid basis to their application in the market.

I spent a lot of time with oscillators when I first started, but never had much success...they only seemed to look right in hindsight, but never in real time. Also, they lag - I find it's easier and more accurate to use support/resistance levels or a moving average to help find turning points. Perhaps they might work in spotting divergences, but I never had much luck with that either.

I used to use Bollinger Bands a lot - they work well for finding reversals when in a trading range, and give a good visual aid for entry when the market is trending and "riding the band". However, I switched to using a Keltner channel because of the distortion you get with B-Bands. Mostly I use the Keltner only as a visual aid, but also on occasion as a filter for certain entries.

valuable: moving averages, highs/lows, sup/rez, volume, volatility These are definitely the ones I use the most. If you think about it, except for moving averages, all of these are based on pure data - not derived from it like all of the other indicators and studies. That's why they work! Actually, I don't really consider highs/lows & sup/rez to be technical indicators because they are pure prices and that is what charts are made up of. But if you do consider them TI's, then the best technical indicator of all is a price chart, IMO.

As far as moving averages go, I think a big reason they work is because they are simple to use and many people use them, so they are a self-fulfilling prohesy. They are very helpful, though.

Just my .02 on what works for me. Everybody's different, and there are plenty of things that work well for some and not for others.

Great thread, darkhorse. I'll be interested to see what others have to say.
 
Well it's not "technical" per say, but the best indicator I have found is simply other stocks.

Jesse Livermore called it Tandem trading, others call it sector trading, sister stock trading, crutch pair trading, etc. Whatever you want to call it, stocks in the same sector move together and some are always leading others. I usually miss the first train but can board the second or third if I'm fast.

If AMAT goes to highs...I don't need any indicator to tell me that NVLS and KLAC are probably right behind it or atleast good for nickle or dime.

As far as indicators go though....Bollinger Bands keep me from chasing to this day.

When I first started trading someone was kind enough to sit down and tell me, "look kid, I put these two lines around your stock. Now they work off of standard deviations and some math that were not going to get into here....all you need to know is that 95% of the time a stock stays within these two lines. So stop buying and shorting stocks that are outside of them!!!".

Yeah I was a "chaser" in those early days.....98-99 you could get away with kind of thing. Those bollingers saved me a lot of money though. Still do.

:p
 
Avalance, I watch the BB but can't trade much with it intraday. Eminis almost never go outside the band, I can't tell if they're going to "walk the band" or reverse. So it gives me something to look at, but if you can give any interpretation clues I'd appreciate it.
 
Originally posted by nljones5
Avalance, I watch the BB but can't trade much with it intraday. Eminis almost never go outside the band, I can't tell if they're going to "walk the band" or reverse. So it gives me something to look at, but if you can give any interpretation clues I'd appreciate it.
More...

A long time ago I used to use stochastic (sp?) to confirm that bollinger bands were likely to "hold".

Infact using First Alert I built a scan that would alert me when any stock in the nasdaq 100 had printed out side of it's bollingerbands AND the stochastic had turned over. the k crossed the something....Ifast/slow.... can't even remember it has been so long. Was a great filter though....I wish I still had it, would work great in this B.S market where everything gets faded.

We modified it using a cross of the RSI back under 80 from above it as well and but it didn't work as good. Sometimes the stock would keep on going. :-P

Anyway these days I just have a "feel" for it. When the market starts to trend, I usually pick up on it pretty fast.

Also with the futures I don't use bollinger bands.....I used and still use channels. I put a moving average line on the futures then i put channels around it .75% above and below it.

Then the middle line (average) serves as support for pull backs in uptrends and resistance in downtrends on the ralley's. I use that middle line to short ralleys and buy pullbacks mainly.

I am mainly very anti-indicators though, as after a while they just cloud up things for me....so it's kind of funny that I am even responding to this thread.

One question I have to ask though is when you trade the mini's are you listening to a squawk?

The squawk will often be the best indication as to whether or not the bollingers will hold....or the futures will start to ride up and down the bands.

Where I used to trade we used the mini's instead of a squawk because they did lead the big contract most of the time...but as others here have commented. Once you get used to the sound of a squawk it is very tough to trade without one. Some traders think that the mini's lead the squawk mostly so a squawk losses it's effectiveness, but I still think where it is most valuable for me atleast is in how it allows you to get a feel for when something sustainable is going on.

Cheers.
 
I'm a number cruncher and data analyser. The more I bury my face in the balance sheets and sec filings the luckier I get. I'm also in the process of tracking price movement in relation to earnings pre- announcements and announcements so I can see if there is a trend there with proven profitability. I'm always open to new ideas but have discovered that charting is purely indicative of where a stock has been and as good as a coin flip in determining where it is headed. I am NOT claiming that any and all charting methods suks wind...I'm just saying it doesn't fit MY style...except I do reference (historical) charts to see how price and volume move in relation to data.

Hey, I haven't seen commisso in a while.
 
The whole point of any indicator is that you know what you're looking for. Take any good trader and take away his/her favorite indicator. Now give them another indicator. As long as they know what it measures, I would bet they will be profitable in short order. The indicator is only a tool. I have yet to meet anyone that makes money ONLY from an indicator.

When I first started trading, I traded with an older gentlemen who only used MACD. He was a breakout trader. I saw him get stopped out a lot with little losses, but when he scored, he scored big. Once in a trade he would draw a trendline under the lows (long) and he would stay with that trade until that t/l was violated. I asked him one day why he used MACD, and he placed a bunch of momentum indicators on a chart, they all looked the same. He just needed something to measure momentum. So he knew what he was looking for. I think a lot of traders have it exactly backwards.
 
You must log in or register to reply here.
Back
Top