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Pony

Which Indicators Do You Use?

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I could tell you ... but then I'd have to kill you! :rofl:

 

Seriously, Steve, if I told you, would you be the wiser?

Would you use it to your advantage, or just sample it for 10 minutes and discard it as a fail!

 

It is a part of a complete strategy, and it has different settings for different Time Frames.

 

I am a swing trader, aspiring to position-trading, so the indicator is suited to the longer TF. You can day-trade or even scalp with it.

 

But here is the hint - the success does not lie with the indicator ... rather, success is found using the multi-time-frame approach. The indicator is there just to confirm the TF are lining up ... and to show when thee is a pull-back.

 

You could use RSI - CCI - Stochastic - PSAR - MACD - or even a simple set of EMA's ... or the TDI. It doesn't matter. What matters is that you get things lined up for trend, and then identify a small pull-back, which is resuming its run with the other higher TF.

 

It's not difficult, and the higher the TF, the more forgiving it is of an error.

Further, the higher TF's rule, until there is a change in the trend, which will be identified in the smaller TF first.

 

It is not complicated ... but it is successful.

 

Do I need to expand on that? Hope it helps.

how many different time frames do you use for confirmation?

 

i just started trading stocks (made my first trade last week) and i use a couple of moving averages and MACD only. im also working on a system that uses bollinger bands, acceleration bands, and RSI right now, but im on limited capital and can only really be in one position at a time :embarassed:

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how many different time frames do you use for confirmation?

When trading swing/position TF you need to be aware of the "big picture."

 

The big picture is whatever the monthly TF is doing, and at the very least, what the

weekly is doing. I don't want to turn this into a thread about what one trader is doing, but in order to work out where price is going in the lower TF, it is a good idea to look at the trend in the higher TF.

 

I have 6 charts on my MT4 profile.

 

I look at the higher TF first. These are the slow-moving elephants, and when they

gather a bit of momentum, they are difficult to reverse. They are not like a speeding train - trains mostly run on a straight course. Elephants (I believe) can pick up a bit of pace, then slow ... turn ... pick up pace ... slow ... turn ... and so on.

 

The "slowing-and-turning" can be seen on the next lower TF, but mostly the elephant

decides it was right in its original course, and resumes its trotting along. Look at a

Monthly and then a weekly chart of the same instrument. Best if you can get them

side-by-side, or at least toggle them back and forth.

 

Pretty soon you get the picture, that while the weekly can deliver reversals, eventually

the monthly asserts its influence, and there is a very large move, as the instrument

moves back into alignment with the monthly direction.

 

If only it was a simple as that.

 

There are problems of course, with this approach.

 

If you look long enough at charts, you would realise that even monthly charts have

major turning points ... and these points have to begin somewhere. They begin with

ONE TICK on the lower TF, and morph into a new trend (eventually).

 

So our job as traders is two-fold ... trade with established trends ... and remain alert for

changes to that trend.

 

Using many indicators keeps traders enslaved to the cacophony of the noisy, lower TF.

I would say from my own point of view, that since I ditched about 5 of my most

treasured and "useful" indicators, and moved even higher up the scale to

weekly/monthly, my trading has been more satisfying.

 

I get fewer trades ... but larger moves ... and fewer failed trades.

 

Over the past 2 weeks, I haven't traded at all - I just have not seen the setups. But in

the last week of July/first week of August, there were some lovely trends, as the EURO

(in its death throes) drove useful trends for enduring periods.

 

Even the higher TF are subject to "noise" (chaos) ... but less frequently. Using a single

indicator can deliver far more clarity to what price is doing over several TF, and I found

that what I lacked above all else, was not an indicator to show me where to enter, but

clarity in what I was seeing.

 

I think there is more clarity in this approach. Swing Trading is worth more than a casual

look. It is not hard, though there is more to it than I have shown in this quick "Cook's Tour."

 

Good luck with your quest.

5aa711300a269_Screenexample.thumb.PNG.c00aceecd1d68775a2bd22a5744495ac.PNG

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That was a long reply, Baker - I hope not too much info there for the thread.

 

But of course you do NOT need 6 charts, and according to the screen real-estate available (I have 2 x 23" monitors) you could remove 2 of those charts.

 

Just don't complicate things that are meant to be simple. Trading is not a pursuit for the intellectual - I am proof of that.

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...great info being passed on, thanks very much INGOT

 

I am sure some seminars pass on less good info than you have there...!!!

 

If you find yourself in Australia, I would love to meet up and show you around,,!!!

 

I would have to ask you one or two more questions though...!!

 

Cheers mate

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...great info being passed on, thanks very much INGOT

 

I am sure some seminars pass on less good info than you have there...!!!

 

If you find yourself in Australia, I would love to meet up and show you around,,!!!

 

I would have to ask you one or two more questions though...!!

 

Cheers mate

:cool: I'm a Queenslander!

 

We like it up here.

 

Beautiful one day ... perfect the next!

 

Hervey Bay is the whale watching capital of the world ... Platypus Bay ... not far from here ... is where hundreds of humpbacks stop off to play on their annual breeding/calving run north the the Whitsunday Islands, before heading south for the summer. Right now the boats go out every day with tourists ... and scores of whales are seen every day.

 

Whale watching runs July/November annually.

 

Hervey Bay Whale Watching

 

Ok ... sorry about the off-topic ... as you were, men!

 

The tourism board should have me as an ambassador - a few free shots there for our locality.

 

Acknowledgement for the image from Owen Wilson Photography:

 

Whale watching Platypus Bay | Owen Wilson Photography

5aa711311ee43_QFC0047WhalewatchingPlatypusBaybetweenfraserIslandandtheMainlandAustraliadsc_0061.thumb.jpg.13e694eaea7309920b42bcde4c30f6de.jpg

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i like to use previous highs and lows - 1st retest of those are more likely than other places to produce a small (or larger) reversal in the opposite direction.

 

candlestick patterns are good. check out bulkowski's site (think it's called thepatternsite.com, or somethig like that. bulkowski. google him) he has conducted some pretty exhaustive reasearch on market patterns including candlestick patterns. this alone can provide an edge to build around.

 

support and resistance - tops of ranges, bottoms of ranges (see previous highs and lows)

 

market profile and VSA are both very sound concepts, I use em, they make money.

 

printed flow data for spot forex trading.... goood to provide confirmation, or help pick a good entry point if you have other compelling reasons to believe in one particular direcational bias in a market.

 

information on options, of a particular interest are barrier options. can develop some really really neat-o trading concepts around barrier options. google: darkstar, trading.

he's developed some good models around various aspects of options and how they influence the spot forex market.

 

sam seiden and supply and demand zones. a good basic primer for starting to see how markets work, and has some very good, high probability trading strategies.

 

I also like trendlines. best indicator in the world to determine if a market is trending, reversing, consolidating, breakign out, etc... a simple diagonal line on a chart. nobrainertrades.com has some great work published on how to use S/R and trendlines for some good intraday profits, and Steve (the guy who runs the site) is the real deal. institutional experience, retail trader, one of the most complete understandings of how the markets work of anyone I know of. Uses trendlines like a trendline fiend.

 

on a very very rare occassion, fibonnaci... and also, on a very rare occassion, a moving average to filter out one specific setup I have.

 

i once heard a guy say if it makes any sort of squiggle on his screen, it can't make any money. I tend to agree.

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When trading swing/position TF you need to be aware of the "big picture."

 

The big picture is whatever the monthly TF is doing, and at the very least, what the

weekly is doing. I don't want to turn this into a thread about what one trader is doing, but in order to work out where price is going in the lower TF, it is a good idea to look at the trend in the higher TF.

 

I have 6 charts on my MT4 profile.

 

I look at the higher TF first. These are the slow-moving elephants, and when they

gather a bit of momentum, they are difficult to reverse. They are not like a speeding train - trains mostly run on a straight course. Elephants (I believe) can pick up a bit of pace, then slow ... turn ... pick up pace ... slow ... turn ... and so on.

 

The "slowing-and-turning" can be seen on the next lower TF, but mostly the elephant

decides it was right in its original course, and resumes its trotting along. Look at a

Monthly and then a weekly chart of the same instrument. Best if you can get them

side-by-side, or at least toggle them back and forth.

 

Pretty soon you get the picture, that while the weekly can deliver reversals, eventually

the monthly asserts its influence, and there is a very large move, as the instrument

moves back into alignment with the monthly direction.

 

If only it was a simple as that.

 

There are problems of course, with this approach.

 

If you look long enough at charts, you would realise that even monthly charts have

major turning points ... and these points have to begin somewhere. They begin with

ONE TICK on the lower TF, and morph into a new trend (eventually).

 

So our job as traders is two-fold ... trade with established trends ... and remain alert for

changes to that trend.

 

Using many indicators keeps traders enslaved to the cacophony of the noisy, lower TF.

I would say from my own point of view, that since I ditched about 5 of my most

treasured and "useful" indicators, and moved even higher up the scale to

weekly/monthly, my trading has been more satisfying.

 

I get fewer trades ... but larger moves ... and fewer failed trades.

 

Over the past 2 weeks, I haven't traded at all - I just have not seen the setups. But in

the last week of July/first week of August, there were some lovely trends, as the EURO

(in its death throes) drove useful trends for enduring periods.

 

Even the higher TF are subject to "noise" (chaos) ... but less frequently. Using a single

indicator can deliver far more clarity to what price is doing over several TF, and I found

that what I lacked above all else, was not an indicator to show me where to enter, but

clarity in what I was seeing.

 

I think there is more clarity in this approach. Swing Trading is worth more than a casual

look. It is not hard, though there is more to it than I have shown in this quick "Cook's Tour."

 

Good luck with your quest.

 

One of the great things about referencing these higher timeframes as a swing trader is that they're inherently less noisy. A weekly or monthly chart still tends to have the "cleanliness" that daily charts used to have back in the days when trend following funds were raking it in. Trading from these higher timeframes is impossible unless you have shed loads of capital, but incorporating clear trend signals from them into lower timeframe systems as Ingot suggests is a great idea.

 

If you want to "prove" this to yourself, you could make the following comparissons between monthly/weekly/daily data:

 

1) Calculate the relative frequency (across a large data set) with which 'swings' occur (a low with a higher low on either side, or a high with a lower high on either side). In "cleaner" data you would expect fewer of these.

 

2) Calculate the percentage of each bar that occurs outside the range of the prior bar, averaged across the entire data set. In data that is "cleaner" and exhibits less mean reversion you would expect this figure to be lower, as price trends into new territory with greater frequency.

 

Hope that's of some use to someone.

 

BlueHorseshoe

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