TA Indicators

[ersatz99]

Hi Madasafish

Can't agree with you on MA and MACD etc.. they're all just statistical representations of the past. The crossing of MA's and swinging of MACD is caused by price action, not the other way round. Also they do not indicate strength of move. By the time you've allowed enough price movement to confirm the indicator, it's too late.

So why not just follow price/volume in the first place?

If you flip a coin 10 times and get all heads, what's the probability of getting a head on the eleventh flip? Same answer with prediciting price reaction when hitting s/r and trendlines n times: unpredicitable based on past performance.

Ers

 

[madasafish]

hmm ersatz: you have made a number of staements that are factually incorrect. i would agree if you are using a 5 minute chart and 20 period mas but use a 1 minute and 3-9 mas and macd and you can predict what will happen quite well.

But nothing beats support and resistance - particularly pivot points...

 

[Grey1]

madasfish,

Time frame does not make a bit of difference in predictive qualities of MACD or any kind of MA.. MA and its derivitive wont tell market where to go ,, IT IS THE MARKET WHICH DRAGS MOVING AVERAGES ALONG LIKE A CHILD...
TRADERS LOOK AT THE HISTORICAL DATA IN TRENDING MARKET AND NOTICE AS SOON AS THERE IS A CROSS OVER THERE IS START OF A TREND.. WHAT THEY DONOT REALISE IS THAT THE CROSS OVER IS " THE EFFECT " OF THE TREND AND NOT "THE CAUSE"..

However if you can make $$$ from them then use it..

 

[ersatz99]

Hi Madasafish

Don't want to argue about statistical probability with you.

Totally agree with you on s/r (with money management of course). This is my preferred method on 5/15 min chart.

Okay, so which instrument(s) are you using the above on, I'll watch it tomorrow. Believe me, if I could find a reliable predicitve indicator, I'd use it. However, 1 min charts are too volatile for my style.

If I've time I'll even record the actual number of successful entries your set up offers. I'm trying to clarify effectiveness, that's all.

you can pm me if you wanna

Cheers m8

 

[Grey1]

For those of you who feel MA has some kind of a predictive qualities then you might be better off to use it as an oscillators.. We call this MAOS...

Strategy would be:-

1)wait for MAOS ( ma oscillator ) to get to its extreme compare to its N period...
2) take a full position when MAOS turns
3) sell 1/2 when MAOS hits the zero line.
4) if MAOS crossed the zero line to above let it run other wise sell the other 1/2

Risk analysis--

Ignore intermediate signals ( not at their extremes) they are false and donot justify the risk

 

[madasafish]

Oh I agree MAs are post event .. but they CAN be predictive..

Let me put it like this: if I can devise a system based on MAs and MACD which when it meets a certain set of conditions forecast the market will go up or down.. i.e a certain direction .. then by definition it IS predictive.

After all predictive indicators - eg CMF, overbought/oversold , linear regression forecasts etc sometimes (often) are only warnings and only work when confirmed with actual results. So they can predict away: I keep get Prechter's Gann forecasts and he has and keeps forecasting a major collpase in US indices since June 2003. Now I'm sure Gann is right and eventually we will see a major fall but when is the issue.

After all predicting an event is no good unless it is confirmed by actual results.

So I have turned it around.. ignore the predictions and just focus on those things that confirm a trend is underway.. after all as I say predictions are a waste of time if the timing is wrong

 

[madasafish]

chart

 

[osho67]

Thanks to everybody for very interesting and informative discussion . The post I refered (which I cant find) just refered some indicators as forward looking. Probably the meaning was pridictive.

 

[madasafish]

I also attach this 1 minute chart of the DAX where all buy/sell indicators were done using moving averages...buy at bottom and sell at top

Who needs predictions when you can tell turns so well..

 

[NEILM16]

Please advise

Hi Madasafish.
Thanks for your posts very intesting are the ideas you mention !!is this the way you like to trade?Looks as if you are using a 5 periodMA and then entering on crossovers?I have heard alot about trading the sp and Dow and was wondering what your thoughts are on trading say a crossover method at certain times in the trading day say 2 hours am after the intial 1/2 hour and the last 2.5 hours or maybe even a shorter timeframe say an hour a day!!using 1 min charts there must be so many signals in an hour anyway!!Could this be profitable?Im always surprised when i hear people say they sit there all day watching a screen waiting for the right moment!!?
Also im interested in getting a realtime charting package and notice u use investor r/t do u like it? I presume you do?would u buy again?Have heard much about sierra but can it do the same things as investor r/t?Like programme ideas and chart pivot points and coloured bars etc?
Many thanks

 

[madasafish]

Hi Neil
I'm not using 5 mas or an MA cross at all. I'm using Drummond Geometry

http://www.tedtick.com/IntroductiontoDrummondGeometry.doc

There is a great deal of information plus a free tutorial..

I trade DAX using this method subject to the following rules.

Price is far away from 20 ema 2 mins (the yellow line)
20 ema is NOT horizontal

in other words I doi not trade flat markets or consolidations.
With IB and Autotrader a 1 point gain is profitable after commissions.. so why not trade evry move whcih will give more than 3 points move. Set a very close stop (I use 3.5 and move to breakeven the next bar after the one I move into profit. )

You can of course trade a 5/10-30 min charts but then I would rewrite the signal to go long when the bar turns green (long) or short (red). The bars are colour coded on a scan.

I've used IRT for 2 years now and it keeps being upgraded IMO it is more powerful than 90% of all programs has multi period display in the same chart and lots of backtesting etc.. Sirra cannot do most of the things IRT can...



Go to http://www.linnsoft.com/index.html and read the reprinted review..

 

[jeadie1]

IRT

madasafish,

A question about IRT, can you link charts. IE with a 5 min chart and a 1 minute chart of ES open, if you move back in time on the 5 minute does the 1 minute automatically scroll back to the appropriate time ?

Thanks

 

[reddragon]

Hi all,
The 2 best indicators are KNOWLEDGE and EXPERIENCE

 

[madasafish]

Jeadie: No.. worse luck

 

[Rognvald]

Hi MF
I have sent you a pm - hope you don't mind
Ron

 

[madasafish]

Ron
Reply sent

 

[Halfbutt]

Big business, why have you got 5400 votes
sorry if this is spam, but i find it anoying when ive only got 1

 

[FTSE Beater]

LOL HalfButt

Look closely, it's BigB's avatar

Either that or 5400 people don't like BB :cheesy:

 

[Rognvald]

The man's got a sense of humour

 

[SOCRATES]

Futures are often used as a leading indicator particularly if trading stocks.
The trouble is if your trading futures you dont have a leading indicator for the leading indicator, if you see what i mean.

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This is absolutely wonderful. I have made a poster out of this if you don't mind and have
it pinned on my wall. It never fails to make me smile. Many thanks.
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