What to use for indicator values?

[asarda007]

Hi,

As a newcomer to currency trading I would like to ask question about how to use indicators. I am using a combo of the following to (try) to geneate trade signals:

1. MACD
2. Schaff
3. RSI
4. Gravity

Could anyone tell me what values do I need to insert for each of the indicators if I wish to do short term trades (hourly to maybe max of 2-3 days). Also would these settings be applicable to indices and equities.

Thanks in advance.

Adi

 

[ilia king]

The basic MACD setting is 12,26,9 C, I prefer the MACD 5,34,5 C, I find that it tends to generate signals faster than the previous, the default setting for RSI is 14,C. You dont need to change them if you change time frames, one parameter for rsi will work on daily charts and on tick charts.

 

[Uncle]

Can someone explain:

2. Schaff

4. Gravity

I thought i had all the indicators but these are new to me.

John

 

[JonnyT]

Nothing, don't use indicators as I think they are a mugs game!

JonnyT

 

[zambuck]

Can someone explain:

2. Schaff

4. Gravity

I thought i had all the indicators but these are new to me.

John

Uncle...Ignoring 'non mugs' and 'know all'....see the link below for Schaff

http://www.fxstreet.com/education/a13.asp

...and following for Gravity indicator....

http://www.fxstreet.com/education/a29.asp

all the best

 

[Uncle]

Uncle...Ignoring 'non mugs' and 'know all'....see the link below for Schaff

http://www.fxstreet.com/education/a13.asp

...and following for Gravity indicator....

http://www.fxstreet.com/education/a29.asp

all the best

Acknowledged with thanks!!

 

[Robertral]

Keep it simple and optimise your TA parameters to each market you trade.....rememebr that TA is time invariant, adn you will have to constantly calibrate to market to obtain the results you want from your TA strat.....Always use a few TA's and try differnt combos and back test them to see how best calibrate to a given market....
I think that all TA is backward looking, so bear that in mind...think they are martingales

 

[asarda007]

Technical Indicators

Thanks for that. The MACD values you recommended are for day trades I assume. Do you suggest using any other indicator?

The basic MACD setting is 12,26,9 C, I prefer the MACD 5,34,5 C, I find that it tends to generate signals faster than the previous, the default setting for RSI is 14,C. You dont need to change them if you change time frames, one parameter for rsi will work on daily charts and on tick charts.

 

[ilia king]

Thanks for that. The MACD values you recommended are for day trades I assume. Do you suggest using any other indicator?

Asarda, MACD values I posted are valid for daily charts and intraday charts, have a look at the screenshots attached. I dont really trade on indicators but use them to confirm my ta, rsi and macd work for me.

 

[ilia king]

The first one is a 5 minute chart and the second one is a daily chart, and the signals look quite good. Have a look at this chart, the 5,34,5 MACD seems to show entry and exit a bit more accurately.

 

[asarda007]

Thanks Ilia King...

Mate thats fantastic... can I ask that you mentioned "I dont really trade on indicators but use them to confirm my ta, rsi and macd work for me." - based on this could you explain the RSI settings that go with your preferred MACD values. I will also be interested to know what are your main tools for TA (I am currently basing my strategy mainly on MACD for entry and exit points). One further question, would these work for indices and stocks as well or mainly FOREX.

Thanks once again, I shall try those settings and look fwd to your repy.
Cheers.

Adi.

The first one is a 5 minute chart and the second one is a daily chart, and the signals look quite good. Have a look at this chart, the 5,34,5 MACD seems to show entry and exit a bit more accurately.

 

[ilia king]

Asarda, I have the RSI 14 and it goes pretty well with the MACD 5,34,5, the rsi is not so often underbought or overbought but when it is, I would wait for a good ta signal or news and jump into the market. I just mainly use chart patterns, triangles, S&R, wedges, pennants, elliots, double bottoms, and when I get a clear signal from them I wait until the rsi or macd confirms an entry. Sometimes I use MACD for entry but when the market is trending otherwise is looks a bit like a mess. These will probably work for indices and stocks. Your main people on ta and indicators would be newtron, skim, and chartman, (probably a lot more whome I forgot the names to) Probably the majority of t2w dont like indicators so watch out


Cheers Ilia

 

[Uncle]

Asarda...........


MIght I suggest you experiment with Williams%R with a crossover of Times Series Forecast (TSF) or any of the trend indicators, such as Linear Regression Indicator, Moving averages (MA) or (DEMA) or (TEMA) - the latter being double and treble M A's.

Now I know you are probably going to ask for the settings: well my friend this is for you to work on to fit your trading style, risk/reward factor etc. but when you find something that works for you on paper, try it out with real money, and you will note the satisfaction gained in so many ways at having achieved so much.

Not sure whether the above works with currencies, but I profit from the indices.

Happy trading

John

 

[nathanfromal]

There are systems out there that will "optimize" your indicator. It will run hundreds of scenarios and find what 'would have' worked best. Just be careful, you can always over opitimize to the point where it looks like free money. These systems are not cheap.

 

[colion]

There are systems out there that will "optimize" your indicator. It will run hundreds of scenarios and find what 'would have' worked best. Just be careful, you can always over opitimize to the point where it looks like free money. These systems are not cheap.

Some comments:

1 - Optimization is not "forever" and re-optimization is necessary from time to time.

2 - There is a right and wrong way to optimize. Simply optimizing can lead to great looking results that then fail in practice. To overcome this the optimization process should include optimization on "in sample" data and then testing with "out of sample" data.

3 - Software for proper optimization need not be very expensive and AmiBroker is a good example.

 

[nathanfromal]

Some comments:

1 - Optimization is not "forever" and re-optimization is necessary from time to time.

2 - There is a right and wrong way to optimize. Simply optimizing can lead to great looking results that then fail in practice. To overcome this the optimization process should include optimization on "in sample" data and then testing with "out of sample" data.

3 - Software for proper optimization need not be very expensive and AmiBroker is a good example.

Thx for the amibroker mention. Can you elaborate on the out of sample data?

 

[colion]

Thx for the amibroker mention. Can you elaborate on the out of sample data?

Suffice it to say that plain vanilla optimization runs the risk of curve fitting. With in-sample data used for optimization and then tested on out-of-sample data this is less likely to occur if the out-of-sample data produces comparable results. An extension and refinement of that process is walk-forward testing. You can Google to find many papers and books on the mechanics and statistics of out-of-sample and walk-forward testing. If one sticks with plain vanilla optimization then the thrill begins with the first trade which will be out-of-sample.