Confirmation Signals

[hagadol]

Trying to slowly get to grips with charting and the indicators contained within.

How does one decide if an indicator is really an indicator or a false one. For instance a break out or the price crossing it's moving average.

At what point higher (or lower) than the price could you say that the signal is true.

I realise this the answer to this question might relate to trading times and personal choice, though I would like to be pointed in the correct direction and have some food for thought.

 

[oatman]

This is the problem. If you load up with indicators, you will never trade waiting for them to all agree. If it's a long term trend you might be OK but most of the time you'll miss the boat.
Indicators lag.
You must select what you are comfortable with. You are the one who pulls the trigger. It's your £$£$££. It's your decision.
It's all about building confidence. There's no magic formula.
Keep asking though, you seem very busy and dedicated. That will get you there!
Good luck

 

[bracke]

hagadol

Have you been on or thought about going on an appropriate course?

I have also been through the mill of reading books and visiting web sites. Whilst I now understand a lot more about investing and speculating I have come to the conclusion that in order to apply the techniques I require some personal tuition which I intend to pursue in the springtime.

I also find that it is difficult to follow some of the threads on this site because of jargon and a lack of my in-depth knowledge which I think a course could provide.

Regards

bracke

 

[TheBramble]

hagadol & bracke, there is no substitute for putting in the hours, reading up on TA, charts, indicators etc. If you're a true trader, it'll be a labour of love anyway and you wont find it an effort.

There are certainly enough people offering courses on trading, but my money would go to those who offer courses on TA and charting rather than selling specific systems.

What you may find as you trawl these forums is that the more experienced traders tend to use fewer and fewer indicators. Some relying purely on price action alone.

As a starter, I'd suggest just picking an indicator for volatility, one for momentum and look at the volume and price action.

But as I said up front, I don't think there is any shortcut to this. Without wishing to get too Zen-like, I believe you need to load up with all this good stuff (thousands of hours of it) before you know what to let it go.

 

[bracke]

TheBramble

I accept the point about reading books and charts but in my own case I think that I have got to the point that I need a one 2 one with the right person

I agree about avoiding buying systems of the shelf. I shall be looking for a TA based course by an experienced trader - there are 2 or 3 who fit the bill and contribute to this site.

If hagadol is anything like me he/she may have reached the situation of being unable to see the wood for the trees in terms of indicators.

I have come to the conclusion that the fewer the indicators the better and that price action seems to me the best route.
I need guidance in this area hence the intention to get one 2 one assistance

Regards

bracke

 

[rossored]

Originally posted by bracke

If hagadol is anything like me he/she may have reached the situation of being unable to see the wood for the trees in terms of indicators.

Please! Indicators shmindicators! They are all a waste of time!

Spend your time learning about price action, forget the indicators and you'll find things improve.


RR

 

[TBS]

Please! Indicators shmindicators! They are all a waste of time!

Spend your time learning about price action, forget the indicators and you'll find things improve.


RR

Amen!

 

[rossored]

Top of this page, six red buttons. One is marked "Discussion". If you go to that one, you'll find another one a bit further down marked "Search for a post". Stick "price action" in there and see what happens. It might take a bit of reading but them's the breaks.

Basically, it involves sitting down, looking at charts, and seeing how prices respond at S&R, how price action works over a x/period timescale, etc on your particular instrument/s

Sorry if this comes across as a bit blunt, bit its no more blunt than your own post.

 

[rossored]

Okay, had second thoughts. Maybe that was a bit too blunt. My apologies (too much red wine at trading time)

Try this instead.

http://www.enthios.com/PrimerBuffypriceaction.htm

 

[hagadol]

Thanks for the posts guys.

Feel I am heading in the right direction.

Is there a link between indicators and beer ? Or should I stay away from that direction ?

 

[ChartMan]

Read the Dow thread.... there you will find time and again that indicators provide invaluable confirmation to help in taking a decision. And before you jump down my throat, it's not me that benefits.
That's not to say that you can't do it without any indicators, there is ample proof that it can be done. But it's a bit like jumping into an F1 car and expecting to do a decent lap or two. You'll be lucky if you stay on the circuit or stay pointing the same way that you started. There is ALWAYS more than one way to skin a cat.

 

[oatman]

When you start, you're not too confident, so if a crossover MA makes you feel a little better when you're in your position, then that's good. Don't write off all indicators.
A chart is a picture of the market. You want to know what happened before, will it happen again? Indicators lag, but they're all part of a picture that you can build.
The worst feeling is when you're in a position and you're on your own.
You need "someone" to hold your hand. Choose a couple of indicators and see how you feel with them. This is all about you It's about how you feel.
Look at the price action is good advice, but maybe you don't understand what people mean.
What instrument are you following? How are you trading? Set up your price feed, your charts. Don't try and do everything at once. Select your contract and study it.
Draw trendlines, they will show you support/resistance. Try some MA crossovers, or other indicators that you think you like. You must experiment. Don't try too much at once.
And you're in the right place if you need help :cheesy:

 

[hagadol]

http://www.enthios.com/PrimerBuffypriceaction.htm

rossored - Thanks for the above link, that was an easy to understand intruduction.

 

[Buk]

some excellent (each way) advice there Hagadol.....might just add, that if you're getting to grips with price action/indicators etc...concentrate on ONE specific instrument/area & really get inside the skin of it. That way you'll become increasingly familiar with that instrument's technical behaviour & fundamental characteristics.....to repeat most of the above, "there aint no short cuts or genie in the bottle" it's damned hard work & long hours, but boy is it bloody satisfying!!...if you experiment with your 'signals' you'll become confident/comfortable with their usage & you'll also tend to reduce the amount used.....practice & hard work, that's the key!....have you visited the following links? might offer a little more benefit!......


http://voodootrader.com/ta_x.htm


http://www.trade2win.co.uk/boards/showthread.php?s=&postid=63594#post63594

 

[TheBramble]

Is there a link between indicators and beer ? Or should I stay away from that direction ?

YES and NO.

There is a link. After 15 pints of Ruddles I notice all sorts of patterns and relationships and correlations that I hadn't before. So I set out my entry criteria and setups ready for the next day and then realise, I might as well go in while the markets are closed - after all, these positions look even better now than they did on the last can.

Then I go to bed and sleep. And then (and this is where the bunny hits the fan) I wake up SOBER...and nothing seems to work out like it should have.

To develop this hypothesis further I'm going to stay drunk the entire trading day and see if that makes any difference.

I'll let you know...

 

[Buk]

:cheesy: :cheesy: ...hmmm, might just give that one a go meself Bramble!!!!

 

[chump]

Bramble,
I think you may be on to something here....we know price never goes in a straight line..so who better to track the zig zag than a trader who can't see straight. It may even become compulsory to be drunk when trading in future.However, there are always consequences to consider. Can we envisage the big thump on the door followed by.."good morning Sir, I believe you may be drunk in charge of a share" ? May I see your position may take on an whole new meaning. The mind boggles at Aussie traders uttering the phrase " I couldn't give a FOREX for it".

Must nip to the off license

Cheers

 

[TheBramble]

[...]The mind boggles at Aussie traders uttering the phrase " I couldn't give a FOREX for it".

LOL.