Useless indicators

[BAT31]

Is that a trick question? I say that, because I thought they were all useless.

 

[Slope Trader]

In defense of indicators... carefully chosen combinations can work.

I have used indicators for trend, momentum and volatility in strategies with defined rules for many years. I value them for the objectivity they have provided to my trading since my initial efforts as a subjective price action/price pattern trader were unsuccessful.

I've posted several charts in the past showing how I use them for swing trading and here are a couple of recent ones. Basically, the slopes of medium-term MAs show trend direction, the high and low regions of oscillators show momentum extremes, and candle structure/context determines whether it's okay to enter or not. Losses are kept small using relatively close trailing stops.

My performance metrics were really boosted when I decided to only trade in the same direction as the slope of a medium-term MA (best results I got were with EMA and WMA). IMHO many trading systems could be improved if the entry signals were only acted on when consistent with the slope/direction of a carefully tested MA.

 

[BAT31]

Hmm, I'm not attacking the veracity of your charts when I ask the following: Does the typical trader, here, trade the four year, daily time frame? I suspect that you have to be highly capitalized to position trade that time frame.

 

[Thon1960]

Who cares about indicators someone else designed? Doesn't logic follow look and investigate the markets and find out how they operate and work so you can verify it first hand for yourself and than design your own indicator around that or get someone to assist if you can't code.

Would that not be a logical way to go?

Good point.

 

[Thon1960]

Overtrading refers to excessive buying and selling of financial assets within a short period, often driven by emotions like greed or fear. It can lead to increased transaction costs, higher taxes, and diminished returns due to frequent trades. Overtrading often results from a lack of discipline, failure to adhere to a trading plan, or seeking instant gratification. It can also lead to increased exposure to market volatility and higher risk of losses. Effective risk management strategies and sticking to a well-defined trading strategy can help mitigate the negative impacts of overtrading.