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Nextek

Is it possible to trade without using any indicators?

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Ive been reading a couple threads in this forum that use trading strategies without indicators. I am not familiar with this method but would like to learn more. Is it possible to trade with just price action alone? How do you take trade signals?

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The day I took all my indicators off is the day I started trading profitably.

 

I dont use a single indicator on my charts, not even volume. I read tape to understand volume. I use a 233 TICK chart with pivot points and market profile.

 

Don't rely on indicators. There is good money selling indicators and will always remain popular. But like the name says... they indicate. Take a look at my chart.

noindicatorchart.jpg.86732f85f5646483b2dceafa7b1e9b79.jpg

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Floor traders do not rely on indicators. They use mainly pivots to identify reversal points. As long as you can read order flow, you really do not need any indicators on your charts.

 

I know a floor trader who uses a notepad with several key price levels to trade. That is his only weapon and he's been doing it for over 10 years.

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I use indicators, I use them a lot! One thing leads to another. Find the buttons and levers and how the indicators tend to move what ever it is you are trading and you will have an advantage. I keep harping about multiple windows and screens get them and use them!

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I use volume and pivots and not much else. I will use the TTM trend indicator for certain trades, and sometimes glance at ADX to give me an idea of the strength of the trend, but I don't use MACD, stochastics, RSI, CCI, or any of that stuff. I certainly don't use any indicators to get me into a trade.

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when i scalp the dow futures (which is how i make my living), i also do not use any indicators (in the sense of lagging indicators)

 

i look for key price levels (potential support/resistance), and i watch the TICK, various related markets (bonds, ETF's etc.), etc.

 

i have traded successfully when on the road using just a 5 minute chart, a line chart of the tick, and a list of sectors. so, it is DEFINITELY possible to trade without indicators.

 

indicators are all (pretty much) derived from a formula applied ot a series of price points. thus, they don't give any more information than price does. they merely compile/compute etc. values based on price

 

fwiw, i *do* use lagging indicators for longer term stuff. i find it very useful. i think the futures are too efficient intraday for me to get any value from indicators. imo, indicators are how the retail traders trades, and they (overwhelmingly) are losing money on futures. i want to trade as a professional, not a retail trader.

 

generally speaking, this has been a means reversion market. i think at least part of the reason is that the market (which is merely the aggregate of all trader's actions) has adjusted to the profileration of screen based/arcade style traders, thus making these methods less useful . the market has to adapt, since it is all traders' actions.

 

i have an edge.

 

if most losing traders are using indicators, it follows that part of an edge is NOT using what the average joe is using

 

all imo of course :)

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Very smart, high iq people can trade without indicators, more stupid left brained people we need them to help us trade... indicators themselfs wont make you rich... concepts of price action wich are independent to indicators will make you profitable... now some indicators amplify does concepts and help silly people like me to trade.... cheers Walter.

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I want to show a pic that I took. x for aggregated contracts less then 50, dot for contracts greater then 50 in that 1 minute bar interval. Red for seller, and blue for buyer.

 

From it you can see that red x out nubmered the blue all the way before 10:30 Eco report. You can see that sellers are anticipate a fall before the report, so they are setting up themselve on the short side.

 

Look at 10:31 bar, seller was able to push down 20 YM points in 1 minute without any efforts, as you do not see any red or blue dot or cross.

 

The moral of this pic is to show that no price derived indicator will show the intention of the buyer or seller.

 

For short term trading, able to to read order flow is an edge over indicator.

 

mho.

 

weiwei

bb4.png.df588bdbb86ba6906e5ac292a660f2e9.png

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Guest cooter

Interesting concept, weiwei.

 

Are these X's and dot's indicative of aggregrated VOLUME on each 1 minute bar - red for down volume (sells) and blue for up volume (buys) - or delta volume?

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Cooter and BlowFish,

 

those are bid/ask from tape.

 

If the transaction is greater then 50 then plot dot. If more then one during this period of time, then keep adding until end of time.

 

On the X, I call them Junior. It is transaction with contract greater then 10 but less then 50. If bid, then it is negetive number, if ask then positive number.

 

X do not get plot right away, it is ploted at end of each bar, after all the addition or subtraction.

 

This will show the who is more active, buyer or seller, at end of each bar.

 

weiwei

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Guest cooter

Nicely done, Weiwei. Makes sense too, at those thresholds, at least for the YM.

 

Would you use the same parameters for larger contracts like the ES?

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these numbers are base on trail and error. Not base on stats.

 

And on ES, so far 700 and 100 are my cut off line. In other word, I am not intertest in any transaction less then 100 contracts. Rule of 20/80 for this idea.

 

weiwei

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OK i think I understand so for junior you look at the delta filtered for trades between 10 & 50 if it's positive you plot a x below and negative a cross above? The bars with no cross presumeably had zero delta possibly due to no trades between 10 & 50 contracts.

 

The dot I guess does the same things for trades greater than 50.

 

Cheers.

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