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Leading Indicators
- Thread starter toc
- Start date
Uncertain, if there was a predictive indicator that had been discovered, don't you think everyone would be using it?
it would be the ''Holy Grail''. there are many esoteric trading systems such as neural networks, fibonacci numbers, Elliot waves, astral trading and Welles Wilder's Delta Phenomenon.
none of them work! if you want a used copy of Wilder's book on
the Delta Phenomenon, i'll sell it to you for 1/2 price. if you think
you have a system, papertrade it to prove its value before
wasting real money. if it works, let us all know!
it would be the ''Holy Grail''. there are many esoteric trading systems such as neural networks, fibonacci numbers, Elliot waves, astral trading and Welles Wilder's Delta Phenomenon.
none of them work! if you want a used copy of Wilder's book on
the Delta Phenomenon, i'll sell it to you for 1/2 price. if you think
you have a system, papertrade it to prove its value before
wasting real money. if it works, let us all know!
The only thing that truely leads price is volume.
Traders are either hitting the bid or hitting the ask.
However volume is by no means a certain predictive since the efficiency of price movement is not known until after the fact.
If you are uncertain whether vol leads price then watch what happens to price when there are no trades passing through the exchange.
Traders are either hitting the bid or hitting the ask.
However volume is by no means a certain predictive since the efficiency of price movement is not known until after the fact.
If you are uncertain whether vol leads price then watch what happens to price when there are no trades passing through the exchange.
Quote from NihabaAshi:
* Other Key Markets
* Market Seasonal Tendencies
* Intraday Seasonal Tendencies
* Key Economic Reports
* Key Regular Schedule Market Events
* Market Breadth Indices
* Insider Information (illegal)
All the above are usually ignored by most beginner traders while most veteran profitable traders use them as a key aspect of their trading plan.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
Most of them are macro economic or fundamental indicators and they certainly have predictive value. But 1) they are not for retail traders, there is no data service (Bloomberg is not data service for retail traders); 2) more as looking at the chart is needed to extract value.
Mark, you are mostly correct. fundamentals of the marketplace can be predictive if you know how to interpret them. if a company announces earnings soundly beating street estimates, you can count on a stock price rise, barring other negative factors. an eagerly awaited IPO will cause stock price to rise. award of a large contract will do the same. these events are not technical indicators, but if you can get in early on the trades, you will probably do better than trading off technicals.
Quote from restan:
Mark, you are mostly correct. fundamentals of the marketplace can be predictive if you know how to interpret them. if a company announces earnings soundly beating street estimates, you can count on a stock price rise, barring other negative factors. an eagerly awaited IPO will cause stock price to rise. award of a large contract will do the same. these events are not technical indicators, but if you can get in early on the trades, you will probably do better than trading off technicals.
Mark is very correct. Unless I am misreading him, what he is saying is not that "strong earnings lead price" (which they of course do) but rather that exogenous factors need to be considered to uncover true edges in the market. Too many traders try to data mine the OHLC charts to find a positive expectancy. True edges are found by considering the mechanics of the market from first principles (eg the time of the month at which institutional investors tend to buy into the market, seasonal factors, etc).
BTW - your prior comment on neural nets not working is very misguided. neural nets are a tool for building trading systems / uncovering edges. it's a bit like saying Excel or Tradestation doesn't work in the market. as with most software, it's what you do with the Neural Net that counts.
Quote from NihabaAshi:
I'm a retail trader and I've been using them ever since the 80's.
Also, most of the veteran retail traders I know, online and in person...
They too use the info.
Yes...I combine them with chart analysis.
* Other Key Markets
* Market Seasonal Tendencies
* Intraday Seasonal Tendencies
* Key Economic Reports
* Key Regular Schedule Market Events
* Market Breadth Indices
* Insider Information (illegal)
Mark
Quote from restan:
Mark, you are mostly correct. fundamentals of the marketplace can be predictive if you know how to interpret them. if a company announces earnings soundly beating street estimates, you can count on a stock price rise, barring other negative factors. an eagerly awaited IPO will cause stock price to rise. award of a large contract will do the same. these events are not technical indicators, but if you can get in early on the trades, you will probably do better than trading off technicals.
I don't trade stocks (I'm a futures trader) and the info I posted isn't all fundamentals:
* Other Key Markets
* Market Seasonal Tendencies
* Intraday Seasonal Tendencies
* Key Economic Reports
* Key Regular Schedule Market Events
* Market Breadth Indices
* Insider Information (illegal)
Of the above that is of economics...
* Key Economic Reports
* Key Regular Schedule Market Events
Of the above that is fundamentals...
* Insider Information (illegal)
Yes, I do use technical analysis (chart analysis)...no indicators.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=52880
However, if I don't understand the causes of the price action via any one of the above I mention...
Whatever I see on the chart isn't valid.
Simply, I don't let TA define the price action.
Mark
Mark, if you have been trading since 1980, you're an old-timer at the business and you undoubtedly have some valuable experience. in my own case, i have been trading sporadically since 1996 using mostly options. there are many things the market is supposed to do, like correct around May and again around late October. if you followed that myth this year, you missed out on a great bull rally during October. i have tried trading systems like Vector Vest and Indigo without good results. i don't know of any system that is much more successful in pre dicting stock price movement than flipping a coin. using the information you suggest should certainly improve your odds, hopefully for good results. again, i would ask you which neural networks system you think is best for trading?