What combination of Technical Indicators to use...

[wayneL]

Wayne,

How about understanding what the fools are doing? Missing the boat

Yeah, but if the setup is good, the smarties will be in before the indicator "indicates".

Price action is quicker.



<edit> which is what you are saying? yes?

 

[It's Snake Pliskin]

Yeah, but if the setup is good, the smarties will be in before the indicator "indicates".

Price action is quicker.

Exactly what I meant.

 

[MichaelD]

Actually a divergence heare and there can be satisfying.

Yes but do you need an indicator to tell you this? It isn't hard to discern when a stock is continually making higher highs on smaller and smaller volumes that the music is about to stop.

 

[stevo]

Price is an indicator. Bar charts summarise information so we can more easily see what has happened over a period of time.

Try changing timeframes. A bar chart is a means of showing where the price has gone over a period of time, where it started, and where it ended up. A 5 minute bar is going to give a different "feel" to the markets than a weekly bar. I guess you could plot each individual trade - but it is much more convenient (and useful) to summarize the raw data into price bars.

Many feel that the answer to trading the markets is to use shorter time frames on their bar charts to get them closer to the action.

If you use a line chart of close prices then the price is summarised into just the close price. It would be just as meaningful to plot the average volume weighted price for the day as the close price - probably more meaningful.

What doesn't price tell us? What indicators are totally useless? If an indicator consistently loses then reverse the way you are using it and see if it can consistently win.

I get the feeling that discretionary traders are more likely to use price action of bar charts, combined with volume to trade. Mechanical traders tend towards indicators combined with volume to develop systems. I am not sure how I could write a system based on price and volume bars alone - there needs to be a trigger (indicator?) to initiate action.

Both approaches can work.

 

[It's Snake Pliskin]

Yes but do you need an indicator to tell you this? It isn't hard to discern when a stock is continually making higher highs on smaller and smaller volumes that the music is about to stop.

Thats only if you trade using momentum Michael or go the trends. Using a simple indicator with a more advanced trading paradigm can produce some accurate signals such as a divergence.

Here is something to think about: using the "indicators" doesn't mean you "use the indicators." WayneL knows what I mean.

Pm me if you want me to spell it out.

All the best for the New Year
Snake

 

[It's Snake Pliskin]

What doesn't price tell us? What indicators are totally useless? If an indicator consistently loses then reverse the way you are using it and see if it can consistently win.

Stevo,
Good questions.

 

[stevo]

Using a simple indicator with a more advanced trading paradigm can produce some accurate signals such as a divergence.
Snake

Snake,
I have not had much luck with coding a divergence system. What indicators do you use for this? I am thinking that I could try divergence with a confirmation signal, maybe use an unbounded indicator like ROC.

 

[It's Snake Pliskin]

Snake,
I have not had much luck with coding a divergence system. What indicators do you use for this? I am thinking that I could try divergence with a confirmation signal, maybe use an unbounded indicator like ROC.

Stevo,

You are far better than me, coding is not my game at all. I am totally deficient with computers etc.
A simple MACD divergence with a not so simple market viewpoint. Pure discretionary.

 

[beachcomber]

I look at daily and weekly price bars first.

I then look at the Stochastic and MACD, MACD-H indicators in conjunction with support, resistance and trend lines for confirmation of what the price bars are suggesting.

The stochastic is a momentum type indicator and is more useful in non trending stocks. The MACD is predominantly a trend following indicator. Volume is also fairly important because it can give an indication of the sustainability of any price moves.

I also use Fibonnacies and bollinger bands to get a feel for potential price targets.

cheers

 

[lesm]

Snake,
I have not had much luck with coding a divergence system. What indicators do you use for this? I am thinking that I could try divergence with a confirmation signal, maybe use an unbounded indicator like ROC.

Stevo,

You may be interested in having a look through this Emini Divergence Journal, which is based on a divergence style approach:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=20761&highlight=keltner+divergence

Cheers

 

[It's Snake Pliskin]

Stevo,

You are far better than me, coding is not my game at all. I am totally deficient with computers etc.
A simple MACD divergence with a not so simple market viewpoint. Pure discretionary.

Stevo,

Try to code something for something like in the link.

http://www.forexproject.com/technical_analysis/divergence.html

 

[>Apocalypto<]

Hey Borat,

I used to use a double MA with MACD with histogram. I would trade once both crossed up or down.

MA would cross frist then if MACD did as well i had confrimation it worked quite well.

Now all I use is OBV and volume with a 21 simple MA for looks!

 

[theasxgorilla]

Now all I use is OBV and volume with a 21 simple MA for looks!

Minimalist...a man after my own heart

 

[CanOz]

200 sma, 13 ema, volume & price and occasionally slow stoc.

Cheers,

 

[>Apocalypto<]

Minimalist...a man after my own heart

thanks,

yeh all i look at is the trend and the real drivers price and volume and OBV is such a great mate to do that.

Also Market depth can shed some good light as well >Follow the heard!<