Why so hard on indicators?

jasonbraswell · Apr 8, 2005

Hey guys. I've been on here a few months now, mostly lurking. What's up with the constant derision of indicators around this place?

Did the MACD kill someone's baby?

I don't know; maybe I got the wrong impression. Do you guys think this is a correct assessment of ET sentiment?

cosmic · Apr 8, 2005

mostly to high expectations I guees, they indicate & offer probabilties, but do not predict.

but who cares anyway?

If you can trade with them & know them inside out they "work".

best,
cosmic

neutrino · Apr 8, 2005

Quote from jasonbraswell:

Hey guys. I've been on here a few months now, mostly lurking. What's up with the constant derision of indicators around this place?

Did the MACD kill someone's baby?

I don't know; maybe I got the wrong impression. Do you guys think this is a correct assessment of ET sentiment?

The problem with indicators is that people just rely on them too much and expect that if they use some fancy indicators they have an edge over someone that doesn't use indicators. Almost all indicators are built using price data or volume. But you already have the price and volume on your chart and the indicators cannot tell you something that is not already on the chart. They don't give any additional information. They have however two advantages - first, it is easier to plug indicators into an automated system instead of trying to build an algorithm to analyze a chart directly and second, they may be helpful to filter the noise in the price data and to make it easier for the eye to spot trends which is the primary goal of a speculator.

jasonbraswell · Apr 8, 2005

Quote from neutrino:

Almost all indicators are built using price data or volume. But you already have the price and volume on your chart and the indicators cannot tell you something that is not already on the chart.

I've heard this before, but to me, that's like criticizing someone for deriving theorems in mathematics because set theory and logic have been laid out. Price and volume have implications that may not be easily observable.

(I'm not arguing with you; I realize you were attributing this POV to others.)

nononsense · Apr 8, 2005

Quote from neutrino:

The problem with indicators is that people just rely on them too much and expect that if they use some fancy indicators they have an edge over someone that doesn't use indicators. Almost all indicators are built using price data or volume. But you already have the price and volume on your chart and the indicators cannot tell you something that is not already on the chart. They don't give any additional information. They have however two advantages - first, it is easier to plug indicators into an automated system instead of trying to build an algorithm to analyze a chart directly and second, they may be helpful to filter the noise in the price data and to make it easier for the eye to spot trends which is the primary goal of a speculator.

What are "indicators"? Indicators are no more or less algorithms. How is your "build[ing] an algorithm to analyze a chart directly" different? The variables you will be setting up in your algorithm, i.e. "decision variables" belong to exactly the same class as your "lowly" indicators.

You are simply running around in circles. Not excluding the possibility for highly successful "decision variables" or "indicators" to exist, you can be sure that you are not going to find these posted all over the place. Perhaps coming up with something better than the garden variety tools is not trivial at all. Reading you, I'm sure you must have stepped right out the Holy Grail Hall of Fame.

Why chide less endowed practitioners for patching an edge together the way they want?

ges · Apr 8, 2005

Quote from jasonbraswell:

Hey guys. I've been on here a few months now, mostly lurking. What's up with the constant derision of indicators around this place?

Did the MACD kill someone's baby?

I don't know; maybe I got the wrong impression. Do you guys think this is a correct assessment of ET sentiment?

If you do objective, computerized testing with inidicator based systems, you'll see that, on their own, they really suck.

Now...used in conjunction with discretionary stuff, well...maybe.

People who think indicators, all by themselves can make good trading decisions over the long haul are naive and have not done the testing. Anything can work for a while, and anybody can get lucky.

Charts/indicators can be a snare and delusion.

ges

neutrino · Apr 8, 2005

Quote from nononsense:

What are "indicators"? Indicators are no more or less algorithms. How is your "build[ing] an algorithm to analyze a chart directly" different? The variables you will be setting up in your algorithm, i.e. "decision variables" belong to exactly the same class as your "lowly" indicators.

You are simply running around in circles. Not excluding the possibility for highly successful "decision variables" or "indicators" to exist, you can be sure that you are not going to find these posted all over the place. Perhaps coming up with something better than the garden variety tools is not trivial at all. Reading you, I'm sure you must have stepped right out the Holy Grail Hall of Fame.

Why chide less endowed practitioners for patching an edge together the way they want?

I see your point, no need to start an argument :mad:

Anyone can use anything they want and if they make money they get my respect

colion · Apr 8, 2005

Quote from jasonbraswell:

Hey guys. I've been on here a few months now, mostly lurking. What's up with the constant derision of indicators around this place?

Did the MACD kill someone's baby?

I don't know; maybe I got the wrong impression. Do you guys think this is a correct assessment of ET sentiment?

No knocking indicators in my world. However, I don't think that they are the living end or that parameters for a specific indicator will be appropriate for all markets and time frames. They are just tools that are best used in conjunction with other tools (i.e., other(but significantly different) indicators and charting studies, including standard trendlines, Gann studies, Fibonacci studies, etc. With experience the proper combination of indicators and charting stuff, reflecting trading style, etc., will emerge.

Thunderdog · Apr 8, 2005

Quote from jasonbraswell:

Hey guys. I've been on here a few months now, mostly lurking. What's up with the constant derision of indicators around this place?

I'm guessing that their questionable utility has something to do with it.

Grob109 · Apr 8, 2005

Quote from jasonbraswell:

Hey guys. I've been on here a few months now, mostly lurking. What's up with the constant derision of indicators around this place?

Did the MACD kill someone's baby?

I don't know; maybe I got the wrong impression. Do you guys think this is a correct assessment of ET sentiment?

There are basically two conversations going on in ET: discussions about the markets and commentary about personal capabilities.

Commonly here, if a person cannot do something by using a market tool, they blame the tool. As a consequence a lot of people get stuck somewhere along the line in being able to realize their potential because they make "blaming" a higher priority than getting rich.

There are many many ways to make a lot of money. Blaming market tools that are used successfully by others is not a way to make money.

Ultimately it comes down to personal development where the person "builds" within himself the capability to be continually successful. At that time sensory skills come to the fore to be able to perceive what is going on and to feed the person's well alligned decision making mental processes.

Most all of this building occurs over time as an iterative refinement. There is no doubt that when a person makes the array of necessary connections, he knows it mostly from and emotional type confirmation.

All of this adds up to something "that cannot be taken away fron you" once it is there.

The posts of people still on the "outside" of this fall into two categories: open or closed. It is not a good idea to be closed if you are not making money and when you are making money, you will find that you ae rarely closed. It is a tough situation to be on the loser side of this setting and not have the mental capability to see the fallacy of your ways.

Read some of the comments of successful traders and see where they turned the corner and how long it took for them to acquire the minimum skill and monitoring set to start to "grow". You will see that a sort of random process of searching "outside" ends and it is replaced by iteratively refining one of the many methods of making money.

There is a thead here about predicting a minimum price change for a buy sell; the name of the originator is from a different method. This is the typical "outside" search. Think also of the diversity represented by the buy/sell genre compared to the hold/reverse genre. It is the difference between "edge" and continuous trading. There is a one way street from one to the other.

Sensing an edge (entry seen and exit predicted) or sensing market operating point over and over arelike night and day.

so you see one class of trader is down on whatever because it doesn't wrk for them. All the while, the other class of trader is utilizing the potential of what they understand fits into their successful processes.
i know this is general and I hope it fits with your general observations about ET.