Informal survey on the accuracy of indicators

[Metamega]

For some reason it's like traders like to create these mystical groups.

Like for instance I would consider long term investors traders as well since their buying/ selling now with the expectation to sell/cover at a later time for a profit.

Price action, technical analysis, quantitative analysis to me all fall under the same umbrella as your working purely off a price series. The order flow guys I would consider in the same boat as quantitative analysis as your saying when "x" happens, "y" is likely to happen.

The only other trader is the fundamental/global macro trader where your taking outside information that is not part of price and building a model/valuation.

This is my view I guess and everyone has their own view on these "really not so important" subjects lol.

 

[Sergio77]

It's never occurred to me that a moving average is an "estimate of future price", and I don't think it is - I literally don't even begin to understand why some people believe this.

You did not take statistics in college, did you?

 

[speedo]

You did not take statistics in college, did you?

Not applicable, price exhibits skewed kertosis. The only time MA is indicative of future price is when PA is flat.....which is hardly an ideal time to speculate.

 

[Xela]

You did not take statistics in college, did you?

On the contrary: my first degree included several courses in statistics.

But that has nothing to do with the fact that it's never occurred to me that a moving average is an "estimate of future price", and I don't think it is, and literally don't even begin to understand why some people believe this.

Looks like "diplomacy" wasn't included among your own college courses, though, Sergio: making ill-informed and patronising comments about people's education is a distinctly sub-optimal way of dealing with forum situations in which someone says something you disagree with. (And with beliefs like some of yours, that's going to happen pretty regularly.)

 

[AnnaLore]

I'm writing a series of blog posts on how new trends in technology are changing the way indicators function today.

Specifically, algorithmic trading has changed the ability of lagging indicators like the MACD, Bollinger Bands, RSI etc to signal reliable movement at the right entry point.

In simple terms, the indicator gives stale data or worse, the stock reverses even though the indicator says it's going up or down, because the algo computer has entered and exited faster than the human can.

Given that algorithmic trading accounts for more than 90% of the volume today, paying attention to the effect on trading signals is crucial. Hence, my posts.

If you have been trading actively for more than a few years, what's your experience on lagging indicators today?

To answer, just copy and paste your answer in the thread.
1) Just as accurate as in years past. My results are just as reliable as they used to be.
2) Less accurate than in years past. My results are not as reliable as they used to be.
3) I'm not sure.

If you aren't sure, look at an intraday MACD chart for several stocks and notice the entry signal and where the stock moved to next. Did it drop against the signal immediately after, before retracing? Did this reversal happen several times during a time period when the MACD is signalling? This is the kind of 'stale' data I'm talking about that is tough to weather.

Looking forward to seeing if others notice this.

Great variety of responses to this question. I learned a lot and hope everyone else did too.

How many of you have worked with Machine Learning where a super computer predicts the movement of the stock or index, BEFORE the news has been priced in?

You can read more about that in this blog post. (yes, I wrote it) I compare algorithmic trading to trading with a super computer. The experience is quite different. https://www.interactivebrokers.com/en/index.php?f=5599&vid=10236 and you can join a webinar tomorrow, Wednesday July 27 at 12:30 ET to see how it all works. https://deepstreetedge.clickfunnels.com/invitation (yes, I will be the host). More food for thought.

 

[Handle123]

On the contrary: my first degree included several courses in statistics.

But that has nothing to do with the fact that it's never occurred to me that a moving average is an "estimate of future price", and I don't think it is, and literally don't even begin to understand why some people believe this.

Looks like "diplomacy" wasn't included among your own college courses, though, Sergio: making ill-informed and patronising comments about people's education is a distinctly sub-optimal way of dealing with forum situations in which someone says something you disagree with. (And with beliefs like some of yours, that's going to happen pretty regularly.)

I cannot see how a moving average has anything to do with the future, it shows past.
To be honest, all the courses I have taken in my life, only one I remember was Bowling, I was so horrible at it when I began, and I didn't know you were not to heave it as far as you could toss it. WOW those people ran at me like I was giving away grass. I look at going to college as a way to reduce the masses, cause when you get the job after you graduate, it is like OJT.

Xela, I look at people who say not nice comments are those who are usually jealous of something or they so dejected that they have not accomplished meaningful goals, normal folks don't cross the line, I feel sorry for those who only way to communicate with others is barrage of negativity, what a horrible way to live.