Technical Indicators for Newbies

Everyone has indicators that they like and ones they don't like.

Some people supposedly only use indicators.

Other people never get them to work.

Experiment with them until you find ones you like or don't like.

Over time you will become familiar with many of them and then when you read about them referenced somewhere else you'll be like "oh yeah, I know what he's talking about!"

Indicators are not 100% accurate, tho. Don't be surprised if you lose money relying only on indicators.

And remember you can change the settings on most of them, too.

In the beginning I wanted to know what the best indicator was. There's no "best" one. By now I can probably name 100 different indicators off the top of my head. In addition to that, I've probably programmed 20 more on my own. And sometimes I'd find an indicator that kind of sucked, so I'd modify it, or use it in a different way than the "official" way, and it worked better like that.

What charting program are you using?

Recently I have removed all the indicators from my charts and am trying to learn to trade that way. What does that tell you? It should say that after all this time I haven't really found indicators useful.

That being said, I believe that going through "the indicator phase" is a necessary step for all traders. Every successful trader I've talked to went through that phase, trying to discover/invest the perfect indicator.

Good luck on your journey!
 
Quote from Richjohns12:

Indicators seem to be very important in forex, and that is pretty much what led me to make this question, aren't they one of the main thing to take into account?
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Sure there are some pecularities if you look at different types of instruments (futures, equities, forex, bonds) or different symbols (like USDJPY, EURUSD, AAPL, RIMM).

Anyway the most important principles are pretty much the same.

But (this may sound hard to believe) forex data is not different from futures data.

This is due to the fact that for the most important currencies (USD vs. EUR, JPY, GBP and some more) there are futures which are quite heavily traded. If there would be a difference between futures and forex people would immediately go in and use that for arbitrating.
 
Quote from oddiduro:

[B

Then, develop a risk management plan.

Then, using whatever indicator you choose, trade on a simulator until you are comfortable.

Then, get an account and trade very small amounts so that you don't blow up right away.

I started with candlesticks. [/B]
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RichJ;

You can ignore most of them;
but 20, 50, 200 ma are amoung the most useful.

Also, i do not use them in a mindless thoughtless manner;
but as a guide.

And genrally;
bulls[price] live above 200dma;
bears[ price] lives below 200dma
 
Quote from TraderZones:

Trying to trade by indicators does not really work. All you will learn, is they will suck up your money and leave you poorer in the process. Neither does Elliot Wave, candlesticks, Fib or other such junk. They have been tested thoroughly and found basically useless, especially after factoring in trading costs.

Try to learn how to trade price action. There are several threads bouncing around that are much more useful than the above.
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What's wrong with you? Why can't you ever post at normal size?
 
you should definately look at indicators, but let price be your guide. supposedly there are people who are successful with only indicators, and supposedly there are successful with only price action.
In my opinion you have to use both, just like you have to use fundamental and technical analysis together to be successful.
the 20 50 and 200 are best mas I agree
Use standard indicators most used ones
like rsi, macd floor pivots. The most used indicators and most objective indicators will give best results.
 
Quote from whatthe:

What's wrong with you? Why can't you ever post at normal size?
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What's wrong with YOU? I have zero interest in self-appointed political correctness cops. I will post as I wish, without concern that it somehow set off your short fuse. Get some Xanax and a hot towel, and go soak your head...
 
I would learn patterns first. Then apply whatever indicator you see that fits the way you trade. The patterns are more reliable than the indicators in my opinion.



TG
 
I agree 50-55 & 200-205 EMAs are very powerful. I think most of the institutional mechanical systems must use those time frames. I find there is always a lot of breakouts at them. Again there is no mindless rule to trade from but they can be very helpful
 
Quote from vrtrop22:

I agree 50-55 & 200-205 EMAs are very powerful. I think most of the institutional mechanical systems must use those time frames. I find there is always a lot of breakouts at them. Again there is no mindless rule to trade from but they can be very helpful
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Vr-T;

William O Neill [IBD] likes them also, standard on his bar- charts;
lots of mutual fund managers keep an eye on them-[50,200dma]

Thanks for typing normal readable size.lol:D ;
& its not so much candle charts are a quote '' hot $$ secret'' unquote-
candles ARE easier to read, especially with 50/+or 55+/ year old eyes.

Another good reason not to use them mindlessly;
no way would a 50 dma be used the same in up- bull or down- bear trend. Thats wisdom.=================================

Also i use 2 different charting systems;
and may look @ 50 dma ,
much more than 20dma,
or 200dma, which seldom/slowly changes much anyway
:cool:

Many times therefore i may look on 20, 200dma ,parabolic stop & reverse, on saturday;
50dma ,50 ema, or 55dma, much more often....................................
 
Use the Fibonacci levels as your Technical Indicator.
It will give you an idea of where the stock is about to go, and possible reversal points.
Been working for me quite a while now.
This is the only thing I use to detirmine my trades.

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