technical analysis software

[mandiuang]

hello. is there anyone here has ever use technical analysis software or automatic signal software or automated trading system? recommend a good one for me

[Soultrader]

Originally Posted by mandiuang hello. is there anyone here has ever use technical analysis software or automatic signal software or automated trading system? recommend a good one for me

A good trading platform is Tradestation. I have never used a mechanical system to trade so I can not advise you concerning that.

You plan to blindly follow an automated system?

[mandiuang]

Originally Posted by Soultrader A good trading platform is Tradestation. I have never used a mechanical system to trade so I can not advise you concerning that. You plan to blindly follow an automated system?

no, of course not blindly follow it. gonna use it along with another technical analysis and indicators.

[Soultrader]

Hello mandiuang,

Are you looking to purchase a trading system that someone has designed? I personally think 99% of all systems are bogus. Also, you will be trading based on the system and would be difficult to implement your own technical analysis into it since this would interfere with the market information the system is designed to trade.

Im not a system based trader and have never dealt with one so I can not give you the best advice. But my advice is to stay away from them.

[torero]

I trade both discretionary and mechanical and both have their advantages and disadvantages.

In mechanical, it's very difficult to find a system that will get you the robust system before failing. Huge learning curve to get there, but once you're there things get easier (same as discretionary). When you finally found one good one (backtested and walk forward it), the real test is how much you'll leave it alone or interfere with it. Psychology has a major impact in it. I thought when I decided to trade mechanical, emotions would be the least of my worries. Wrong, your baggage goes with you as well. It relieves your entry decisions, but it's the taking profits or let it run is where you'll be your own demon.

Trading someone's system is a difficult task too. Have to do due diligence if you plan to lease someone's system, drawdowns, trade frequency and slippage and commissions being added to the performance report or not. There tricky vendors out there touting their systems, but do alot of homework before wasting good money. If you plan to lease them, stay away from daytrading or frequent trades systems and stick with swing or longer. After 2 years of research and system building, I found that the higher the time frame or less frequently traded the systems, the more robust they are. You can see for yourselves some vendors are automated systems:

Collective2 web site is loading... We rate Traders and Trading Systems

Although eSignal does do automation, I use and recommend tradestation for building trading systems as well as automate them to trade by themselves, there are also traps to them. After 2 years I found 2 systems that seem to stand the test of time (5 yrs of backtesting historical data and 6 month in walk forward or real time testing), one swing and one daytrade and they trade every other day and not more. If you plan to build trading systems, start with higher frames (60min or higher), then chances of finding good systems.

You can have a look at mine. I'm not selling it but it's for my own record-keeping and personal journal.

Trendhugger | One Trend.

Good luck.

[mandiuang]

thanks for all your replies. i am a newbie. so far, i only trade with these indicators: MAs crossover, CCI, candlestick chart and fibonacci support and resistance. the result is not too bad for a beginner, but i really want to improve my trading ability. would be glad and thankful if you would share your system and indicators to produce signal.

thanks

[torero]

You have a good start already with these indicators. The only missing element is chart reading and that requires time. Problems with indicators is that too many people over-rely on them for signals and confirmations. Price has to confirm signals, not the other way around.

I trade on patterns, and these changes constantly, so signals come and go but judgement comes from understanding price action.

My #1 advice is learn money management first! This will keep you in the game for a good while until you are settled or found your own system. Learn and build a sound money management and the other parts like indicators and methods will help you build your own system.

[Soultrader]

Originally Posted by torero You have a good start already with these indicators. The only missing element is chart reading and that requires time. Problems with indicators is that too many people over-rely on them for signals and confirmations. Price has to confirm signals, not the other way around. I trade on patterns, and these changes constantly, so signals come and go but judgement comes from understanding price action. My #1 advice is learn money management first! This will keep you in the game for a good while until you are settled or found your own system. Learn and build a sound money management and the other parts like indicators and methods will help you build your own system.

Thanks for sharing the resources torero. I agree chart reading or understanding price action takes time. But this should be considered a mandatory skill to learn before anybody places a single trade.

mandiuang: Market knowledge, money management, trading strategy, and trader psychology are the important elements of trading. Good luck

[mandiuang]

Originally Posted by Soultrader Thanks for sharing the resources torero. I agree chart reading or understanding price action takes time. But this should be considered a mandatory skill to learn before anybody places a single trade. mandiuang: Market knowledge, money management, trading strategy, and trader psychology are the important elements of trading. Good luck

thank you very much for all the replies, it help me to have a better understanding of the market. what is money management, and where can i learn about it? is it has something to do with our trading stop loss or target profit?

[torero]

Two books I learned money management is Elder's "Trading for a living" and Van Tharp's "Trade your way to financial freedom". There are chapters that explain about money management but the summary is this: only risk the maximum of 2% of your account on each trade. Say, you have $10,000. Your stop loss for next trade is $200 max. Then you're down to 9000, now your stop loss is now $180. This method also imposes position sizing limit. Over time, if your account decreases the risk is reduced as well. Theoretically you can trade into infinity but in real life this is not possible. But the upside you get is this: you spread your bets (number of trades) out longer. This will increase your chance of survival (longer you stay in the game, the higher your chance of making it). 2nd is discipline. As much as the word sound, it's hard than anyone think. Even if you lose, discipline should be your priority. If you enforce it religiously you're half-way there. Keep in mind that this comes with a positive expectancy (this is explained in details in Van Tharp's book as well), probabilities of making profits over time in your strategy/methods.

I'm sure there are others here have different approach to money management but I use this one. The important thing is find money management that fit your personality (your maximum threshold before you get a nervous breakdown). This means how much money can you tolerate losing on each trade without losing your cool and objectivity? Or how much maximum drawdown (consecutive losses) can you handle before you lose complete control. If you can answer this question, it's easier to find your style of money management.

I daytrade because I can't stay the entire session (6.5 hrs is alot of hours of constant concentration for me). Also because I can't stand losing a large amount because of overnight surprises even if there are more upside is greater than downside. It's a trade-off I have to live with to save my sanity.