Too Many Indicators?

[CoolHandLuke]

Handle,

Do you think TL's are little more than a self-fullfilling prophecy due to their long standing history in the annals of TA and, therefore, extensive use by lots of traders?

For humans to trade something they need to impose some sort of structure or pattern to that which is traded. The expectation of price remaining within those channels helps it to happen? Otherwise why should price bounce off those lines?

Or, maybe those lines are nothing more than a form of money management? If price does bounce up off a lower TL, let your winner run. But if it breeches, get out quickly. Price really doesn't bounce off those TL "respect" simply illusion??

Your thoughts greatly appreciated!

 

[AAAintheBeltway]

Hey guys,

I'm a relative noob trader, blew up a really small account and dumped myself back on demo for a while now. I've been focusing on day trading US Equities.

Earlier on when I blew up my small acount, I tried to keep things simple by using trade patterns and learning how to read the tape. After reading up a lot of books and so forth I have started to add some indicators in. I was not, and I'm still not, looking for the holy grail, just a few items that would help me confirm my style of trend trading and reversals.

So far the indicators that I have are the Bollinger Bands, MFI, Accu/Distr, MACD Histogram, and Bollinger %b. This on top of me drawing out the R and S and trendlines as well.

I find it very messy and would like to simplify things but I'm not sure what to do. I don't really like the MACD as it seems relatively slow in confirming trends. I intend to keep the Bollinger Bands for volatility andI want something for Volume and Momentum.

Any thoughts?

I can think of a lot of things that go into good daytrading. Only one of them involves an indicator. That would be the use of a moving average as a trade filter. I only buy if price is above and only short if it is below. DB uses a trendline. I would bet we could switch and do about as well. Occasionally, I will ignore it if I am trying to pick a bottom or reversal, but those trades often are losers. In trading, crude is often superior to sophisticated.

I tend not to use volume much, but volume spikes can convey important information.

 

[CoolHandLuke]

I tend not to use volume much, but volume spikes can convey important information.

How so?

 

[bone]

Gorgano, if you are using Bollinger Bands, please make absolutely sure you are using them correctly and as John Bollinger originally intended and designed. My observation over the years has been that many traders use BB's incorrectly.

IMO, using multiple time frames yields better results than using multiple indicators for the most part.

 

[Gorgano]

Thanks for all the great feedback guys. I've been taking a small break trying to figure out how I want to move on with things.

bone: Yeah I've read Bollinger's book a few times and I do like the concept behind it but I definitely need time to digest and apply it properly. Like trying to figure out when it's Trend walking the bands and when to trade it as a reverse. This is why I was looking for 1-2 separate indicators to confirm the trend and limit the number of trades I have

AAA:Yeah there's such a high learning curve to daytrading. I'm just trying to figure out my Trend trading system right now which is why I'm trying to decide on a few items I will use and stick with it. I find it too messy right now and too many things to look for. I figure all indicators can be useful as long as you really, really understand how to use them. I think once I have my "system" figured out, it will calm me down and help me a lot in preventing overtrading and managing my psych.

It's so hard right now trying to navigate all of this right now without a mentor guiding me around. I really appreciate how much all of you are taking time out of your day to help me out! Please keep critiquing me and give me some more suggestions.

 

[panzerman]

I'm just trying to figure out my Trend trading system right now which is why I'm trying to decide on a few items I will use and stick with it. I find it too messy right now and too many things to look for. I figure all indicators can be useful as long as you really, really understand how to use them. I think once I have my "system" figured out, it will calm me down and help me a lot in preventing overtrading and managing my psych.

Just remember, even random walks can produce patterns that look like trends.

 

[murray t turtle]

Hey guys,

I'm a relative noob trader, blew up a really small account and dumped myself back on demo for a while now. I've been focusing on day trading US Equities.

Earlier on when I blew up my small acount, I tried to keep things simple by using trade patterns and learning how to read the tape. After reading up a lot of books and so forth...................................................................... I don't really like the MACD as it seems relatively slow in confirming trends. I intend to keep the Bollinger Bands for volatility andI want something for Volume and Momentum.

Any thoughts?

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Mr Georg;

Well, i dont like MACD much also. so far so good,LOL

Big problem with momomentum;
it gets one WAAAAAAAY out of a trend early. When i finally do close a trend;
George, it maybe the end of the day/end of a trend, not momentum related , at all. I am admitting,,,,, moMO maybe great in 1990's, fractions were also,1990s.

Some trader write moMO, but month/month is much better.Wisdom is profitable to direct.

 

[AnthonyFelipe]

I use the MACD and two EMAs, mainly to determine trend and momentum. Other than that, I just keep an eye on support and resistance levels.

 

[Dyna.Mo]

It all depends on what you are wanting the indicators to indicate....and if you cant answer that why would others be able to.
otherwise its a lucky dip

Probably the best post on the thread.

 

[Dyna.Mo]

You have the best indicator to show you momentum already.

Your eyes.

Bars or candles tell you everything you need to know.