The Rookie question: How reliable are indicators(TA)? If it says "buy" would you buy a put? If it says "sell" would you buy a call? The market does not always seem to match the TA but it seems most of the time the TA is effective. I realize this is not fool proof and just one of the many tools for trading.
Indicators(TA)
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As long as your software works correctly and is correctly configured, they're all 100% reliable in that they display exactly what they've been told to display, calculated on the basis of historical (typically but not always fairly "recent historical") prices.
It doesn't.
Indicators don't say "buy" or "sell". (If they're commercial ones, sold in a format the purports to instruct in that way, I wouldn't touch them, myself.) They present information.
What matters is how you choose to use them; how you interpret the information they display; whether you find a way to include their use as part of the tested, proven, genuine edge you need to have developed, before you start trading a funded account.
There are definitely long-term successful traders whose edge includes the use of indicators (and I used to be one of them).
There are also definitely long-term successful traders whose edge doesn't (and I'm one of them).
The two statements just above, however much people might discuss whether indicators are "good" or "bad" (and in trading forums they do that exhaustively and exhaustingly), are both factual, objective and incontrovertible.
The long-term successful traders I know myself, who use indicators, are mostly using them to determine their overall bias (i.e. whether to trade at all and whether to seek potential long or short entries) rather than to determine exactly when to enter/exit trades.
This next bit is subjective opinion only, and I can offer no convincing evidence for it: it seems to me that in general, successful traders who switch from "using indicators" to "not using indicators" rarely, if ever, switch back. (The counterpart observation, "vice-versa", may even be true, too: I probably wouldn't know.)
You've answered your own question, there, in a sense. And welcome to the ET forum.
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The second part is correct. Trading is ultimately a judgement call...in all its collectiveness of the word.
Each new day, or each new chart you look at,...is Part art, part science -- It Has to be.
Everything works...till it doesn't. That's why traders who try to rely on a fixed, flat, basic, set it and forget it formula invariably gets hurt...and their best hope scenario is now just to break-even.
Each trade is truly a test...a test of your mind, skill, and tactics and strategy and psychology and fortitude.
Each trade you take on feels like playing in the Superbowl and taking the SAT exam.
Trading is kind of like climbing Mount Everest...you don't just simply do or attempt it blindly, basically, squarely each time.
There's a host of dynamic and fixed variables to constantly consider and watch and monitor how things plays out, or heads to.
Miss Market can truly be a beautiful endless Lady Fortuna cornucopia to you, if you truly understand her.
But if you don't understand, or fail to read her subtle signs...she can be the biggest bitch, in The World, to you.
2018 ET.
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Applies to EVERYTHING trading. There are no bells that ring. There are no colored lights that actually flash. There are no sirens that actually sound. The market is always right. It is what it is. Notwithstanding the possibility of GIGO (garbage in, garbage out, bad/inaccurate data), indicators and drawings derived from market variables are designed from immutable truth. The market is always right. It is what it is. Interpretation as a means to profit is correct or not.
I suppose it might be possible to use compicated indicators to improve trades, but I haven't seen the evidence. For a while I liked TSI because it seemingly reduced drag by essentially taking the derivative of an integral (or was it the other way around? I'd have to go back and study it) but in the end it didn't seem to flash "signals" any quicker or better than more simple methods.
In theory I like the idea of rolling volume into the indicator (OBV, etc.) but again in practice I'm not sure it works better than more simple methods.
What would those more simple methods be? Well, moving average crossovers do seem to do a decent job of getting into a trade fairly early (but never at the bottom) and out (but never at the top) while offering a reasonably reliable exit signal when things go south. (OK, maybe not "never" but rarely as far as tops and bottoms go.) I think it's just as important to develop discipline in trading something like moving average crossover, which means identify your time frame and then taking wins and losses as they flash. In this way you can develop a fairly rigorous track record that you can go back and study, and perhaps tweak.
All my opinion, of course.
In theory I like the idea of rolling volume into the indicator (OBV, etc.) but again in practice I'm not sure it works better than more simple methods.
What would those more simple methods be? Well, moving average crossovers do seem to do a decent job of getting into a trade fairly early (but never at the bottom) and out (but never at the top) while offering a reasonably reliable exit signal when things go south. (OK, maybe not "never" but rarely as far as tops and bottoms go.) I think it's just as important to develop discipline in trading something like moving average crossover, which means identify your time frame and then taking wins and losses as they flash. In this way you can develop a fairly rigorous track record that you can go back and study, and perhaps tweak.
All my opinion, of course.
I think it's mathematically possible that averages calculated on closing prices for the period of interest could still lead to intra-period tops/bottoms that exceed what had come before. I'm not gonna count on it (or go hunting for corroboration).
Thank you all for your replies. Found them to be helpful. Seems indicators need to be taken with a gain of salt. Hummm it seems I used the wrong terminology, "indicator". I apologize to Xela. I was looking at the "technical summary" and the "technical analysis". They use "buy" and "sell" so my question was if they say "buy" would you buy puts? If they say "sell" would you buy calls? Would this work most of the time or is there a flaw with this line of thinking?
Those intra-period tops/bottoms would not signal even a non-permanent crossover at those peaks even if there was a rare crossover at the period end, so you will NEVER get out at the top/bottom.