Indicators are great. The key is that you can't apply them (at least from what I've seen) in the standard TA text book kind of ways. That just won't work. But they can make great money if you do the unconventional...
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Why so hard on indicators?
- Thread starter jasonbraswell
- Start date
Indicators are great. The key is that you can't apply them (at least from what I've seen) in the standard TA text book kind of ways. That just won't work. But they can make great money if you do the unconventional...
Quote from John47:
the argument that indicators are made up of data already on the screen is true, but the corollary to that is that an indicator is always objective.
The argument could be made that the exact opposite is true, that the indicator is always subjective, given the nearly infinite choice of settings, all selected by the trader (even if he selects "default"). Price, on the other hand, is price.
Quote from ShoeshineBoy:
Indicators are great. The key is that you can't apply them (at least from what I've seen) in the standard TA text book kind of ways. That just won't work. But they can make great money if you do the unconventional...
Indeed,
use them as told in TA books and you run with the crowd, the crowd loses money. Use them in an unconventional way and you can take advantage of the crowd, because you know what they will do.
All great inventions came from people that left the path of convential thinking and where open for experimenting on a unconventional way. That's the way to open new and unknown insight. I know what i'm talking about because i found a very very very very very small new unconventional thing that works extremely well. It works well because it's unconventional.
Quote from Grob109:
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.
Jack, great post, again.
Im getting there much more rapidly than before. Still have a ways to go but am doing 50% wins at about 2:1 currently, so much better. Your posts help. Thanks.
Quote from spike500:
Indeed,
use them as told in TA books and you run with the crowd, the crowd loses money. Use them in an unconventional way and you can take advantage of the crowd, because you know what they will do.
All great inventions came from people that left the path of convential thinking and where open for experimenting on a unconventional way. That's the way to open new and unknown insight. I know what i'm talking about because i found a very very very very very small new unconventional thing that works extremely well. It works well because it's unconventional.
Exactly. I don't knowif this is what you're saying but from what I've seen you just have to "enhance" the indicators. The indicator(s) are merely a baseline or starting point. You have to use them, again imho, as a springboard for something else...
But to throw out indicators completely is a big mistake from what I've seen.
Quote from Lamont_C:
The argument could be made that the exact opposite is true, that the indicator is always subjective, given the nearly infinite choice of settings, all selected by the trader (even if he selects "default"). Price, on the other hand, is price.
Point well taken. I was thinking something along the lines of....
the 10MA crossed the 50MA.....or XYZ fell to its 200EMA...whatever...
=> Facts...
vs.
This is a pullback from a high, therefore a buying opportunity, not a reversal....or this support will hold...
=> more subjective...more room for a trader to interpret, possibly let bias in.
What your saying is valid though, I just wanted to make sure what I was trying to say was understood.
Quote from John47:
Point well taken. I was thinking something along the lines of....
the 10MA crossed the 50MA.....or XYZ fell to its 200EMA...whatever...
=> Facts...
vs.
This is a pullback from a high, therefore a buying opportunity, not a reversal....or this support will hold...
=> more subjective...more room for a trader to interpret, possibly let bias in.
What your saying is valid though, I just wanted to make sure what I was trying to say was understood.
If you would use a crossover of the 50MA and the 200 MA you have an objective fact.
If on the other hand you trade by watching the tickertape your trades will be influenced subjectively.
If you would replay last friday in six months, your crossing of the 2 MA's will be exactly the same; your "tickertapereading" will give another entrypoint than before.
I also wonder how you can backtest a system if it's not based on facts. If the facts change constantly ( what happens when you don't use indicators) your results will have no statistical value.
Quote from John47:
Point well taken. I was thinking something along the lines of....
the 10MA crossed the 50MA.....or XYZ fell to its 200EMA...whatever...
=> Facts...
vs.
This is a pullback from a high, therefore a buying opportunity, not a reversal....or this support will hold...
=> more subjective...more room for a trader to interpret, possibly let bias in.
What your saying is valid though, I just wanted to make sure what I was trying to say was understood.
Under these conditions, particularly if Trader B is attempting to predict, then one of these scenarios does seem to be more objective than the other. However, there is the "so what?" factor to consider.
For example, the 10MA (simple, exponential, weighted) crossed the 50. So what? What do I do? Is the price in chop? Is it breaking through resistance or support of some sort? Do I buy/short the cross? Or wait for the close? Have I tested this? Do I have a plan?
Ditto with Trader B. There is a pullback from a high. Fact. But so what? It could be either a retracement or a reversal. Is it holding at support? What does B do if support holds? What does he do if it doesn't? Of course, if B tries to predict what price will do at that support level, he's in trouble. But a statement regarding price movement without reference to indicators can be just as objective -- or subjective -- as a statement made with reference to indicators.
Quote from Lamont_C:
... But a statement regarding price movement without reference to indicators can be just as objective -- or subjective -- as a statement made with reference to indicators.
I don't agree. If you replay 10 times the same day, you should have 10 times the same trades. If you don't have 10 times the same trades you're subjective, because nothing changed during the days. The data was at each replay identical and should therefore give exactly the same entry and exit points.