experience
What generates your trading signals?
- Thread starter Howard
- Start date
Hope you find your indicator EsFocus.
You will never find that indicator for the simple reason that a powerful system works on a set of indicators. There is not a magical indicator that will generate big profits in all kind of markets. Things are far more complex. That's why I do not believe in KISS.
A good system has at least 3 dimensional indicators, not the standard x and y axis.
I agree with that. An indicator or a suite of indicators would need to be part of a larger system. I don't believe in KISS either.
Time along x and price along y - what would be along z, then? Surely not volume?
Years ago, I thought the MACD -- and 90% of T/A stuff, for that matter -- was a grotesque fraud perpetrated upon guileless traders.
I was a tick scalper at the time, and lived the 4-hour/1min chart. And what worked, worked. And what didn't, was (that) 90% of everything else.
Then, late 2017, I start changing my time frame.
No, really. 
So! So, "it depends."
"Right tool for the right use" and all that.
Who knew?
Could you elaborate? On what market? And what time frame?
My comments relate to ES. Day trading. I'm sure other markets may be different.
If you're day trading is easier to generate a buy signal since its a shorter timeframe. But if you're waiting for the indicator to be oversold on all timeframes (short/medium/long), ideally that's the best but its a rare occurence and you will be leaving profits on the table. Same goes as using say 5 indicators. If your plan is for all 5 to generate "buy" signals before you execute, it probably very rarely happens.
Thank you for your post.
Generating a signal is not usually a problem. Generating a signal which is reliable and not false; completely different story.
I do not use 'classical indicators' to give me signals yet, although I do have a few indicators which helps tell me what's going on.
But your last comment is interesting. It reminds me of the trader Mark Weinstein in Market Wizards. He claimed to have a 100% winning strategy. One of the things I recalled him saying was how he'd use multiple types of analysis and he would ONLY enter if everything lined up perfectly.
I also remember him saying how he never catched an entire move day trading indexes, but was happy to just take a small piece between the high and low.
Maybe it's time to reread that book and particular interview.
Thank you for your post.
Generating a signal is not usually a problem. Generating a signal which is reliable and not false; completely different story.
I do not use 'classical indicators' to give me signals yet, although I do have a few indicators which helps tell me what's going on.
But your last comment is interesting. It reminds me of the trader Mark Weinstein in Market Wizards. He claimed to have a 100% winning strategy. One of the things I recalled him saying was how he'd use multiple types of analysis and he would ONLY enter if everything lined up perfectly.
I also remember him saying how he never catched an entire move day trading indexes, but was happy to just take a small piece between the high and low.
Maybe it's time to reread that book and particular interview.
A signal doesn't have to be right 100% of the time. Casinos make millions from blackjack which has less than 1% house edge. A six sided die doesn't have to throw 1 2 3 4 5 6. A signal which is right more than half the time is a good signal. The point is to limit your risk when the signal is wrong.
100% winning strategy in the very long term. Sure.
But there is no such thing as 100% winning trade.
CIS a famous Japanese trend trader once said 4 out of his 10 trades are wrong. He cuts his losses when they are wrong and lets it ride when its correct.
You should find the optimal point of information. Too little info is bad, too much info is bad too as it will become confusing and /or impossible for your brain to see the situation clearly. There are limits on the amount of info that your brain can manage/analyze. You have to find the essential info, quality instead of quantity. Increasing the number of timeframes will result in parabolic info; first it improves and at a certain point is will work counterproductive. Intraday you should find a few entries. If you cannot find them you should reduce the info. Adding 5 timeframes or 10 indicators will work opposite of what you try to achieve.