Indicators ?

[nolan1977]

Morning,

As a newbie I need to pick your brains. There are so many technical indicators about. The internet is rife with the "best latest must have" technical analysis tool.

Can anyone give me some advice on how many indicators they and why? I am leaning towards candlesticks and not sure on which there to use. With all the choice out there I feel swamped. I don't want to use too many and suffer from over analysis paralysis. I hope I have explained this correctly.

Many thanks

 

[Lee Shepherd]

Morning,

As a newbie I need to pick your brains. There are so many technical indicators about. The internet is rife with the "best latest must have" technical analysis tool.

Can anyone give me some advice on how many indicators they and why? I am leaning towards candlesticks and not sure on which there to use. With all the choice out there I feel swamped. I don't want to use too many and suffer from over analysis paralysis. I hope I have explained this correctly.

Many thanks

Hi Nolan,

There literally are an unlimited amount of indicators as you have now probably found from your research. Even an indicator such as MACD or simple moving average can have a multiple of factors, cross overs and numbers relating to them. Then there is the question of how one would go about using such a set up.

Unfortunately but obviously , there is no one hard set rule or one size fits all. This you have to find yourself. Ultimately it would be left down to your own judgement to see if you are of trader material.

One good indicator to play around with and as a starting point to understanding your chosen market/s, are moving averages. You will quickly begin (over several full time weeks) to understand how the market moves within its usual parameters and how it reacts to unusual events/new breaks etc. This will give you better insight to how you would then look to trade this.

NOTE: Contradiction to some of my other misunderstood posts:

Demo trade this to give you a better feel for the market and see if you can develop your own style of trading. And most importantly, keep strict records. You will find a diary of your beliefs and feelings as to why you entered/exited a trade will help looking backward. You may note a vast difference on this from demo to live. Once your book says you are profitable, move straight over to live and see how you fair. This is an investment, losses will be inevitable, its how you handle these that really count.

PS: Anyone who knows me and has spoken to me off the site recently, Brewski, Tomorton, Keith, Ceydababy, Tricks to name a few may recall me buying in to Carillion. Well, on Monday the company went in to liquidation meaning I lost a sh1t load of money. But being out with me, you would never know - not even on the Monday when a few of us over here (Manila) hit up a few clubs. What i'm getting at here is don't trade on emotions - they are the biggest account killers out there.

Lee

 

[Pat494]

Indicators can only say what happened in the past.
No indicator can predict the future.
You won't want to believe this but sadly it is true.

 

[Lee Shepherd]

Indicators can only say what happened in the past.
No indicator can predict the future.
You won't want to believe this but sadly it is true.

Hi Pat - :clap:

You are somewhat correct in what you say, however, a prediction is just that - a prediction, a guess, a forecast. An individual can use indicators to predict. Therefore I respectfully disagree with your statement that 'no indicator can predict the future'. It does of course identify the past 100% accurately. Looking forward, its up to the individual to get better than 50% correct (subject to win rate - P/L amounts).

I predict that it will rain within the next day. What research could I do to help with my prediction or more to the point, what would help another to predict against my bet so they win and I lose? Well for starters, a simple look at the weather forecast would give an idea, but again, is just an idea. It's not set in stone and a weather forecast is just that, a forecast - a prediction. A prediction based on past events and monitoring the weather over many years using the best and latest technology.

Lee

 

[tomorton]

Indicators are just a tool: the job tells you what tool you need.

So if your strategy relies on momentum change and you absolutely cannot get this from the price chart, you need a momentum indicator. Just remember it gives a distorted version of the picture so do not automatically buy when it goes above 80 or sell when it goes below 20.

 

[Lee Shepherd]

Talking of Carillion and my losses, here is the post that boasted my profits swinging around on Carillion. It was fun until the swing flung me off in to a pile of sh1t.

There was a nice healthy net loss on this one.

http://www.trade2win.com/boards/trading-journals/72926-lee-shepherds-trading-diary-20.html

Lee

 

[Pat494]

Talking of Carillion and my losses, here is the post that boasted my profits swinging around on Carillion. It was fun until the swing flung me off in to a pile of sh1t.

There was a nice healthy net loss on this one.

http://www.trade2win.com/boards/trading-journals/72926-lee-shepherds-trading-diary-20.html

Lee

Have a good think about what you have written.
" A healthy net loss "


No such thing.
Perhaps you are trying to deaden the pain ? But...........
Have you become so beaten down that you try not to care ?
Maybe akin to the " Stockholm effect " ?
Sounds like you need time off

 

[nolan1977]

Hi Lee,

Thanks for the info. I will give that a try and see how it goes over the next few weeks. I have a friend that has given me some books by Nison on candlestick charting so am currently reading those at the moment. Have you ever used candlesticks ?

With regards to markets as a novice would I be better suited to trade in futures, indices, option, forex. I know this is a really hard question to answer but some direction would be great if possible.

Thanks

Nolan

 

[neil]

Hi Lee,

Thanks for the info. I will give that a try and see how it goes over the next few weeks. I have a friend that has given me some books by Nison on candlestick charting so am currently reading those at the moment. Have you ever used candlesticks ?

With regards to markets as a novice would I be better suited to trade in futures, indices, option, forex. I know this is a really hard question to answer but some direction would be great if possible.

Thanks

Nolan

Price -Candle sticks or bars etc -unlike macd etc, does not lag

 

[DazJones]

Indicator can help with swing trades imo. For daytrading most people prefer price action nowadays. I think indicators which can help identify range or swing highs and swing lows is beneficial.