Lagging Shmagging, I don't really give a damn. Since 1995, that's over 20 years of data, we can easily see 7 (including current one) MA crosses, how many of those made it 'kindergarten simple' to figure out when a market was turning and also was it kindergarten simple to establish strength of trends?
Why do traders still use lagging indicators?
- Thread starter TSLexi
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Lagging Shmagging, I don't really give a damn. Since 1995, that's over 20 years of data, we can easily see 7 (including current one) MA crosses, how many of those made it 'kindergarten simple' to figure out when a market was turning and also was it kindergarten simple to establish strength of trends?
It's necessary to view everything with a timestamp as equal, neither leading or lagging ...to get past the abyss of how to define lead and lag in a less common and more helpful manner than the way the word lag is commonly used.
We need more LAG! ...but it's not clear if that's the type of lag that's beneficial. There must b some way to sort this out.
Indicators based on long-term timeframes like 10-months and 20-months tend to smooth out all the noise and whipsaws that challenge most of us. The problem with taking trade signals from long-term indicators on monthly charts is 1) drawdowns are very tough to stomach, 2) profitability and cash flow is not reliable for managing your finances or performance metrics, which is monthly or quarterly for most of us, and 3) we're not going to live forever and need to operate on a shorter timeframe.
I usually see long term charts like this in reports and studies prepared by economists, not traders. Economists like to draw conclusions from the long-term big-picture view, but they don't have real money on the line like traders do.
Thumbs up...he deserves that. ...but don't let it get in the way of extracting the value or sincerely thanking him for the value he added immediately after he put his foot in his mouth. I didn't expect that from him but he freely gave u his best from deep within ...and that's what we need more of.
mav, thanks man.
You've listed 3 points related to inconvenience, your points do not prove that money can't be made when aided by lagging indicators. Position traders and traders that aren't dependent on extreme leverage usage can derive valuable information from longer time frames.
Let's not forget that order flow is also a lagging indicator of someone else's intentions and what exactly does order flow reveal about their trading plan? There is no inside information that can be derived from order flow, too many players.
Don't dismiss the value in you own observation. The inherent natural smoothing longer bar intervals provide is useful. It's even possible to eyeball my 1035 to 1100 target for the bottom of an ES bear market but that's not how I determined it. I simply extrapolated the past 2 bear markets into the future but that's not what's important because it doesn't have to go there.
What's important is longer interval charts can b used to determine if it's realistic to b considering if we are in a bear market. ...and also when that bear market condition fails to proceed as a bear market. I can't post a chart illustrating how that can b determined but current price location says we're still headed to 1035 to 1100 at the moment.
I would say my points relate to solvency, not inconvenience. But I understand your POV.
I didn't make any reference to order flow, but since you brought it up I will comment on it. I agree with you on the general case about order flow not being useful. The exception is when it enables front-running. This is how HFT's jump ahead of you in the queue. And back in the day, floor traders would see a broker coming into the pit with a large order and take a position to exploit the anticipated market move. But none of this applies to your garden-variety retail trader.
Does your handle Dr Atsum, indicate you hold a PhD? If so, which field?