No Indicators at all

Hi, while working on my system and trying out a few thing and tuning indicators etc I wondered if I could trade at all with out the support/handicap (depends on ur point of view) of indicators. Pure Price Action. At the most trend lines on the price chart.

So I thought to start an experiment where I try to trade on pure price action and no indicators. Won't be easy but no pain no gain.

So here is my first pick. BSL.
It held its support line and today it broke out of its wedge. The smart ones would have picked it at $10.00, but hindsight is such a b1tch :banghead:

The question is : Has the next upside price wave started ? What would confirm it ?

The volume in the last two days has been average so will it support the rising SP ?

Can certainly work.
The turtle system used no indicators just pure price action.
And it seems they did okay ;)

Try running the turtle system over the ASX over, say 5-10 years, and dont include the last 5 years. Its far from the best system in the world but it returns a few dollars.

Hi, while working on my system and trying out a few thing and tuning indicators etc I wondered if I could trade at all with out the support/handicap (depends on ur point of view) of indicators. Pure Price Action. At the most trend lines on the price chart.

So I thought to start an experiment where I try to trade on pure price action and no indicators. Won't be easy but no pain no gain.

So here is my first pick. BSL.
It held its support line and today it broke out of its wedge. The smart ones would have picked it at $10.00, but hindsight is such a b1tch :banghead:

The question is : Has the next upside price wave started ? What would confirm it ?

The volume in the last two days has been average so will it support the rising SP ?

Ron1n,

I have just stated to trade with indicators on indexes.

I still use a cci18 on FX but I will be taking that away as well very soon.

have made a trade, short on the xjo shorted at 4.20pm yesterday afternoon.

see how it pans out.

I am working towards not using them at all.

Ron1n,

I have just stated to trade with indicators on indexes.

I still use a cci18 on FX but I will be taking that away as well very soon.

have made a trade, short on the xjo shorted at 4.20pm yesterday afternoon.

see how it pans out.

I am working towards not using them at all.


Closed this afternoon for 20 points.

The question is : Has the next upside price wave started ? What would confirm it ?

An indicator:)

An indicator:)

Exactly.
Indicators, due to their laggingness, are useful only in confirming price action.

The volume in the last two days has been average so will it support the rising SP ?

ROn1n, here is my take on this, with which I'm hoping those more knowledgeable and experienced will help if I go off the rails.

We are looking at price action and volume or VSA, which I hope I'm learning!
Look at the two ultra high volume bars and forget that charting software colours them red. Indeed turn the colours off if you can. Go with the premise that price rises looking for supply and falls looking for demand.

In relation to the first ultra high volume bar in early March, price had been falling, did it find demand? Yes. How do we know, because you can not have ultra high volume without it. There had to be that amount to match the ultra high selling and the price closed well off its low so after all that volume demand was still around at the end of the day. Although it's a supply bar, we can confidently say that demand intersected with supply. As MW would say, what was the response? Look 5 bars later, a small supply bar with very low volume. Jump on board or wait confirmation of demand volume?

In relation to the second ultra high volume bar in late June, the exact same thing can said. This time the, no supply left response, came on the next bar.

We have no such signals at the time of you question, my thoughts are as follows:

1/. All that professional buying on the two ultra high volume bars, I can not see on the volume chart where they could have sold. Should be bullish until they decide to sell.
2/. Look at that hugh down spike below 9.60 about 8 bars ago. With the low volume leading up to this, the cynical amongst us could think this was engineered to take out the stops. This was high volume on a wide ranging bar that closed a mile above its low. Last chance for the Professionals to get on board without pushing up the price with their own buying? In any case it should be bullish.

After the big white above you triangle it should be all go, but is the move half over on this bar?

Hmmmm.

CFD.The obvious is not so obvious.
Once you get your head around this stuff (And it will turn what you thought you knew on its head) it will be like a search light was switched on.

<pedantic>But what is an indicator?

Sure oscillators and MAs are indicators. What about trend-lines, Fib levels, pivots, donchian channels etc. Are these also not derivative constructs of price, and therefore indicators?

Nizar mentioned the Turtles, who used a Donchian channel system. Donchian channels are still indicators in my book, as they derive from price history. They are drawn on the chart, referencing the previous hi/lo point in the lookback parameter, much the same as a moving average.

Even trend lines do this.

True indicator-less trading is just price bars... and nuttin' else.</pedantic>

<pedantic>But what is an indicator?

Even charting the price could be deemed to be an indicator... given you never chart price alone. Of course that's if you want to go down this route.

I think it's very hard to use an out and out floor trading analysis without actually being a floor trader...

</pedantic+>

Even charting the price could be deemed to be an indicator... given you never chart price alone. Of course that's if you want to go down this route.

I think it's very hard to use an out and out floor trading analysis without actually being a floor trader...

</pedantic+>
So indicator-less trading is a fallacy? I'd say so. We all (chartists) use some form of price interpretation... even if just labeling waves.

Perhaps the title of the thread should be "No Oscillators at all"?

</pedantic+> or </semantic+>

guys thanx a lot for replies. The reason I am trying not to use indicators is simple. If I don't know what the basic price action is telling me, then one tends to rely on indicators too much and I wouldn't know when the indicator has stopped working (think MA in a choppy market) cos I got no other reasoning to compare it to. Remember even a broken watch is correct twice a day.

CFD thats a great post. Plese keep them coming.

Here is ZFX. I have drawn two boxes, are they flag/pendentants ?

I have put dates on volume bars that I think signify a change. Something else I notice that before every move the volume drops quite a bit and then subsiquent SP rise is sustained by high volume bars.

So if we don't see a rising vol bar in the next couple of days should be get cautious that the there may be a SP drop coming ?

ROn1n,

I use nothing but Point and Figure charts so I suppose that is close to 'no indicator' trading.

Happy as a pig in custard with them and never feel the need to delve into more arcane charting (although Candlestick charts are rather pretty).:)

The only slightly odd thing is that they only seem to work if I roll my own in Excel. I have used charting packages to create P&F's but they have no soul.

There's probably a million different ways to trade but in the end much of it is luck anyway.


ice

ROn1n,

I use nothing but Point and Figure charts so I suppose that is close to 'no indicator' trading.

Happy as a pig in custard with them and never feel the need to delve into more arcane charting (although Candlestick charts are rather pretty).:)

The only slightly odd thing is that they only seem to work if I roll my own in Excel. I have used charting packages to create P&F's but they have no soul.

There's probably a million different ways to trade but in the end much of it is luck anyway.


ice

What a cop out statement. Luck.............luck....people like you should go away. If wheat is going up due short supply I want to be on wheat, is that luck or common sense. Common sense works for me all the time. We make our own luck by working at it, so it aint just luck IMHO

Well there are differences

We all want indications
Maybe not indicators

start with raw time and sales

We organize it into charts to help derive indications

some charts aggregate the time and sales into discrete units of time

and make price vs time charts of various types.
line , vertical bar , candles ...

The volume histogram at the bottom is a separate chart read in conjunction...

Some charts aggregate the time and sales into discrete units of price

Point and Figure , Renko , three line break etc

probably range bar charts

Then there are equivolume charts
and charts that aggregate by discrete units of volume

volume bars... also there are tic bars

We cut the territory into different maps
To gain perspective and derive indications

Indicators... can be either optimized with the attendant time constraint and distortion. Or they can be sensitive to the speed of the actual price volume activity ..

eg OBV is just a line that follows volume
a 10 day moving average is a distorted constrained (lagging ) view ...
That is it is always 10 days of data ......even though the action NOW might span 5 days now and 5 months then.. and speed up to make the next bar
where it all happens...

We want timely and sensitive indications
The use of charts and trend lines ( that are just straight edges )
can give Us all We need ...........And less misleading

All indicators can mislead

And with good reason

smart money only uses these things against Us

They create false liquidity that is there to take advantage of
If it is to someones advantage to do so.

So time and sales are collated into maps.
Possession of good maps have won wars.

But drawing fantasy lines over the maps often led to the loss of Wars
indicators second third and fourth derivatives of price and volume
are such fantasy lines..

motorway

A trader should first learn to postition from a bar chart and volume alone.
In my opinion, once a trader has become experienced at analysing price dynamics such as types of trends be it, creeping/struggling,corrective/distributive), normal trends(impulsions), and can differentiate between the two types, it becomes possible to position from countertrends(where most of the postitioning should come if one is good at this) from just looking at price alone, one can instantly gauge the momentum or rate of change of price relative to the preceding types of trends in play just by knowing about types of trends and patterns.

Their is no offset or lag to worry about.

In many instances indicators that are derived from price are nothing more than crude cutoff filters or smoothers at the expense of delay. Most are "dimensionless" and as such cannot give you much of an idea as to the magnitude of the fluctuations of price. An example of this is when indicators go into oversold and over bought ranges and the market keeps trending. So how high is too high and how low is too low?? I have managed incorporate Centered Moving Averages such they are a representation of the some of the dominant cycles in the price action and are phased to the price action. As such, estimates of price fluctuations can be made(in advance) as they move from one extremity to another as prices are hardly ever in equilibrium but rather passing through equilibrium to an extreme. This can then be used in conjunction with pattern of the trend as a confimation a trend maybe at risk of ending.

But drawing fantasy lines over the maps often led to the loss of Wars
indicators second third and fourth derivatives of price and volume
are such fantasy lines.

While we're out with war analogies, this one sounds like 'buy-and-hold',

"Hold fast and never retreat, never", Adolf Hitler.

Sorry, couldn't resist. :o

I have put dates on volume bars that I think signify a change. Something else I notice that before every move the volume drops quite a bit and then subsiquent SP rise is sustained by high volume bars.
So if we don't see a rising vol bar in the next couple of days should be get cautious that the there may be a SP drop coming ?


Very characteristic chart at the moment

And a good example of why you need to keep up to speed

Very clear stopping volume

demand took all the supply look at the volume and the ultra wide range on that bar on the 16/08

demand is seen to overcome supply
no doubt about it

the next bar is already a type of test

We get the rally that then makes your supply line doubtful.

Now do We get a lateral move consolidating the move
Or a secondary test of the stopping volume ( volume and thrust lessening )
That if successful then confirms that stopping volume as ending action
( It ended the down trend and turned it into a uptrend )
A selling climax..

In a selling climax weak hands handover there shares to strong hands

The floating supply is diminished...

And a strong technical position is built...



Also look at the relative strength situation
How strong was the bounce compared to the broader mkt and
it's sector peers ?

motorway

While we're out with war analogies, this one sounds like 'buy-and-hold',

"Hold fast and never retreat, never", Adolf Hitler.

Sorry, couldn't resist. :o

Exactly

He seemed to think enough lines on a map
would make the difference and If he believed in them
They would become real


motorway

<pedantic>But what is an indicator?

Sure oscillators and MAs are indicators. What about trend-lines, Fib levels, pivots, donchian channels etc. Are these also not derivative constructs of price, and therefore indicators?

Nizar mentioned the Turtles, who used a Donchian channel system. Donchian channels are still indicators in my book, as they derive from price history. They are drawn on the chart, referencing the previous hi/lo point in the lookback parameter, much the same as a moving average.
Even trend lines do this.

True indicator-less trading is just price bars... and nuttin' else.</pedantic>

Interesting perspective, Wayne.

What about trend-lines, Fib levels

No

A moving average, MACD , RSI etc etc

have a look back period
that is separate to the price volume action..

Fib levels and trend lines are where they are because of the geometry of the price action on the chart.. The have a mathematical certainty

The halfway point between a low and high is only to be found where it actually is

the value of a moving average is determined by the time period
selected

and the average of anything is an abstraction

Never step blindly into a creek with an average depth of 1 meter
esp If You can not swim etc..

However if you measure the distance to the middle
and You can jump to that point ( A large rock might be there )

Well That point exists it is real...
And You can safely jump to that point

It is not an abstraction like the average depth is...


Geometry is real it is not derived it is part and parcel...

It can be unrecognized

And of course it can be misused...



motorway

We should also learn to use the other dimension the market gives us - TIME.

By referring to the timeframe higher than that which we trade from, we get a good idea if or not we are trading with the underlying trend. Looking at the time frame lower than that which we trade from gives us an early indication of what could happen (on our trading timeframe).

With the market being a bit more uncertain than usual, I am completely out of it at present, and spending some time honing my "skills?", in readiness for when the market decides to pick a direction to trend in.

I would be very greatful of any info - book references etc, where timeframes are a topic (other than the golden oldie Elders "Come into my trading room"

Thank you

No

A moving average, MACD , RSI etc etc

have a look back period
that is separate to the price volume action..

Fib levels and trend lines are where they are because of the geometry of the price action on the chart.. The have a mathematical certainty

The halfway point between a low and high is only to be found where it actually is

the value of a moving average is determined by the time period
selected

and the average of anything is an abstraction

Never step blindly into a creek with an average depth of 1 meter
esp If You can not swim etc..

However if you measure the distance to the middle
and You can jump to that point ( A large rock might be there )

Well That point exists it is real...
And You can safely jump to that point

It is not an abstraction like the average depth is...


Geometry is real it is not derived it is part and parcel...

It can be unrecognized

And of course it can be misused...



motorway
Still an extraneous construct derived from past price action. Of course largely a semantical argument... what is an indicator and what isn't; if not an indicator, then what is it?

Not worth bickering over, just differing perspectives. :2twocents

By referring to the timeframe higher than that which we trade from, we get a good idea if or not we are trading with the underlying trend. Looking at the time frame lower than that which we trade from gives us an early indication of what could happen (on our trading timeframe).


Yes


And this is where P&f charts are useful

earlier in the thread

I mentioned that a P&F chart
cuts the time and Sales into
units of price....

Independent of time... that is in the stocks own time

time adaptive...
A P&F chart will slow to a stop
and speed up again

If You like lengthening and shortening it's time scale


They have high clarity
and reveal trend and it's characteristics
very powerfully

because you are charting
price continuity vs price reversal ( and not Price Vs time )

character of a trend in a nutshell


You are right
In what You say

motorway

Here is
A Comparative Rel Strength chart
ZFX Vs XJO with a 2% box size and a 3 box reversal

and a straight ZFX .25 box size and a 1 box reversal
chart

Very characteristic chart at the moment

And a good example of why you need to keep up to speed

Very clear stopping volume

demand took all the supply look at the volume and the ultra wide range on that bar on the 16/08

demand is seen to overcome supply
no doubt about it

the next bar is already a type of test

We get the rally that then makes your supply line doubtful.

Now do We get a lateral move consolidating the move
Or a secondary test of the stopping volume ( volume and thrust lessening )
That if successful then confirms that stopping volume as ending action
( It ended the down trend and turned it into a uptrend )
A selling climax..

In a selling climax weak hands handover there shares to strong hands

The floating supply is diminished...

And a strong technical position is built...



Also look at the relative strength situation
How strong was the bounce compared to the broader mkt and
it's sector peers ?

motorway

Motorway can you please shed some more info on the bold parts? thanx.

The dictionary defines climax as the peak, the extreme or the end of something and as the point of highest dramatic tension or a major turning point in the action. What does a climax do? A climax stops a trend either temporarily or permanently, depending on the subsequent action.
A climax is preceded by some sort of a trend. Now, what is a trend? A trend is the tendency for the price to move in a specific direction: It is the line of least resistance. The trend may be a major, minor, intermediate or intraday trend and it may be an upward trend or a downward trend. The type or violence of (the) climax generally should be in keeping with the type or speed of the trend. In other words, you would expect a much greater widening of spread and heavier volume on a climax stopping a swift moving major trend than on one stopping a leisurely moving minor trend.

Ok stopping volume is volume that stops a trend
It means the other side turned up
in this case it means buyers , demand
took all the panicky offering of the sellers
To such an extent that there and then the trend was stopped..

We have ultra wide bar. High volume close near the highs..
The subsequent action is confirming

ZFX does not just go sideways.. it has a nice little rally
that makes it back past the halfway point
and through (just) the supply line

the selling climax has a widening spread and increasing volume.

Any climax must always be regarded as a potential or a possible selling climax until it is proven by the secondary test.

OK the rally is running out of steam...
a number of things can happen now


You can see it on the P&F chart as well
every reversal is important
esp ones that reverse 50% of a previous long column

Supply has run smack bang into demand
and the volume shows Us a lot of demand
stopped the trend

Hence stopping volume...

Now the secondary test
will confirm If that stopping is a starting of a new trend..

Ok People will have preferences depending on what they want to see..

But, I agree with those that state that

Bars are much easier than candles to read (for this type of analysis)
much clearer to draw trend lines accurately
and because We see strength in down bars ( like this one )
and weakness on up bars..

We don't want red (stop) and green (go) colours

We want to see the waves of buying and selling gather and lose followings

the waxing and waning of demand and supply
the one blue colour clearly reveals the wave like movement in the volume bars
red and green separate what should be seen as one .

The top of this rally sets up another halfway point
with which to measure the supply in the reaction back

The more violent the climax the less
ranging likely before a new trend emerges

because.. less weak hands need to be shaken out...



motorway

Price itself is an indicator. It indicates price.

So if not using any form of price then making a rational investment decision would be impossible.

Hi snake

So price is an indicator
That points to itself :)

As long as We don't think it points to value...

We need indications

It is a matter of how far removed
Our indications are derived from...


motorway

Hi snake

So price is an indicator
That points to itself :)

As long as We don't think it points to value...

We need indications

It is a matter of how far removed
Our indications are derived from...


motorway

Hi Motorway,

VSA is lagging not predictive. If one wants to predict or choose the future based on it they can. But the information they use is lagging and hindsight in nature. Not to say it is useless or perfect, neither.

Yes we need indications to draw from.

Semantics aside, any indicator one finds of use and perfectly understands is of value to the trader/investor. Nothing can deny that as being fact of a fact.

Enjoy your posts.
Regards
Snake:)

VSA is lagging not predictive. If one wants to predict or choose the future based on it they can. But the information they use is lagging and hindsight in nature. Not to say it is useless or perfect, neither.


VSA is a proprietary software...

It is also a part (only a part) of a method
developed by Richard Wyckoff


Which He defined as anticipating a mks/stocks future direction by it's own action

That action seen in terms of

Price
Volume
Time

They are the raw materials which by their own action give indications.

Price Volume Time have various attributes

However it is clear that the indicators that Ronin (No indicators)
was speaking about are derived from that raw material

And drowning in a creek with an average depth of 1 meter
is not just semantics (Or do People really have 2.2 Children)....

Of course if there is someone who is acting in the moment
Who was the first to Buy at the lowest tic
and the first to sell at the highest..

Then We are all lagging and following along
All part of the crowd to some extent

But anticipation is the edge of success
In any competitive arena...

I see it as a pole a part from prediction..

It is identifying forced moves of high probability..

Recognizing

That unconscious following proceeds as If it is all straight lines
(Why else is there such volume at bottoms and often at tops)

While a conscious following of the action anticipates
waves cycles and reversals and turning points..
Because exhaustion is always an issue..
Positions of technical strength and weakness are constantly being generated.

Position is where process unfolds
It is a much overlooked aspect
identifying position..

Volume tells Us that many jump on at the end of a process as a new position is being created (They are often the final brick that builds that position)..

You can see those dynamics in the ZFX chart (at the very point it was most oversold, was where the most selling occurred)...

I have a very dim view of prediction...
But will continue to hone My skills at anticipation

Which involves identification of position, trend and flow.



motorway

and may you continue to prosper and make many more post as you have here.
ROn1n congratulations on starting this thread. There are many here who make a great use of indicators and are proud of their expertise, however in this thread we should be able to comment on not using them without offending anyone.

I have a very dim view of prediction...
But will continue to hone My skills at anticipation
Such an important distinction... and what those critics of the various schools of t/a completely miss.

hmm
Not all.
Prove --disprove---prove--disprove.

hmm
Not all.
Prove --disprove---prove--disprove.
A bit obtuse... what are you saying?

Our trading records are almost certain to have their fair share of losing trades, and sometimes too many for comfort - its only a matter of time before we get hit by a period of drawdown - it may start to-morrowor it may be sometime in the far off future - but it will happen if you trade long enough - so we should have a good idea from our testing what this drawdown will be, and have the financial backing to cater for it.

We still get hit with losing trades even after the most meticulous analysis has been made - and this will always be the case, due to the human factor in the market.

If there was a sure-fire trading methodology, it would have been "picked up" by the top end of town fund managers, who have milliions of dollars to allocate to research and development.

The market is not consistently predictable!

All our selection process (whatever it is) does, is get us into the market, and this is probably the least important factor in trading. We possibly spend an unjustifiable proportion of our available time in the selection process

What we can expect from our analysis is to increase the probability that our trade will turn out to be a winner.

There is no proven right or wrong way to the selection of trades, whether it be pure chart reading, elliot wave or the use of indicators. Which ever method you use , you should feel comfortable with it - and if it works for you - go for it

Using multiple timeframes have a lot to offer in the selection of high probability trades.

As the market evolves, similar recurring patterns occur across all time frames, and it is these patterns which we know from experience offer good trade prospects - some of us use indicators to find these patterns (including me), possibly the more "expert" traders locate them purely from price action

Different types of trader/investor have their own preferred chart timeframe from which they make their trading decisions - so when we get a buy signal on the timeframe above and below that which we trade from and it is also giving a buy signal, then we have a crowd gathering across the three timeframes, with the intension of placing buy orders - so their is a higher likelihood of our trade being successful, at least in the short term - and then its all down to trade/money management (your written trading plan)

The above works for me.
Good trading
Peter

A bit obtuse... what are you saying?

I think he's pointing to EW theory. I wouldn't necessarily call it an indicator though, but rather a gaming strategy.

I think he's pointing to EW theory. I wouldn't necessarily call it an indicator though, but rather a gaming strategy.


Actually I'm speaking of ALL analysis.
Whatever you use for trading and how ever you apply it is constantly a case of either
Proving a setup---technical/fundamental or both.
OR
Disproving it.

ALL trades start with a setup.Technical/Fundumental.
Oscillator/Pure Price action.

Your setup is in anticipation of a move in the direction you are trading due to your analysis with your timing tool as your setup.
Then time to Prove---Disprove.

Actually I'm speaking of ALL analysis.
Whatever you use for trading and how ever you apply it is constantly a case of either
Proving a setup---technical/fundamental or both.
OR
Disproving it.

ALL trades start with a setup.Technical/Fundumental.
Oscillator/Pure Price action.

Your setup is in anticipation of a move in the direction you are trading due to your analysis with your timing tool as your setup.
Then time to Prove---Disprove.
:eek7::eek7: I still don't get your point.

You seem to disagree by saying "not at all" and then expand on the very same point folks have already made, confirming the point initiated by motorway. :confused:

Whats the "not at all" about?

and what those critics of the various schools of t/a completely miss.

I was refering to this .
but after re reading it notice the word "critics".

What a silly duffa.