StockFetcher Forums · General Discussion · what indicators do you find the most powerfull?<< 1 2 3 4 5 >>Post Follow-up
maxreturn
745 posts
msg #60604
Ignore maxreturn
3/18/2008 12:18:10 PM

Agree with both camps. Price is king but I agree with Zuber. Indicators can give you context as long as you don't overly complicate things. I like to use the 50 and 200 period ema's as well as the RSI14 to help me identify the trend. I use a simple oscillator (close divided by ema(50)) to tell me whether a substantial enough pullback has occurred for me to consider taking a position in that stock. In most cases I also like confirmation that price has either touched a key support/resistance level and/or a key fib level.

nikoschopen
2,824 posts
msg #60606
Ignore nikoschopen
modified
3/18/2008 12:28:52 PM

The problem with that approach is that by the time you analyze and absorb all the information derived from different indicators/oscillators/squigglies, ure prolly late to the scene. However, regardless of which school of thought you might belong to, the importance should be placed on whether ure able to make money as a trader.

maxreturn
745 posts
msg #60608
Ignore maxreturn
modified
3/18/2008 12:47:38 PM

Niko, like I said..."as long as you don't overly complicate things". I don't pay attention to all the little "squigglies" as you put it. The few indicators that I do use give me context, nothing more. My approach is actually a very simple approach which looks to buy the dips in a bear market and sell the rallies in a bear market. An approach that has worked very well for me thank you.

nikoschopen
2,824 posts
msg #60609
Ignore nikoschopen
3/18/2008 12:53:28 PM

Hence I too added the disclaimer that it really doesn't matter what you use as long as "ure able to make money as a trader".

Cheers!

rtucker
318 posts
msg #60619
Ignore rtucker
modified
3/18/2008 4:08:46 PM

Doroneliasian,
Whats your time frame? Almost all daytraders/ swing traders on this site . If your desired hold time is longer, in the position/trend (search on Mark Crisp or Darvas) trading catagory then you have to at least consider "breakout" strategies. Donchian, Bollinger , "x day high", channel breakouts and MA(x) crossover strategies.

Of course, exit stategies / stops etc differ with these methods too.

Using swing trading indicators/methods for entries can have a higher short term positive expectation than the breakout methods so some use these metods to nail the "SOB" early (a counter trend entry) and hold for longer than the 1st price swing.

As said so well by zeezeetop , Price and the Trend are King .

I am studying/looking into these methods myself so if you have any questions I'm sure I can quote you a few paragraphs. :>)

However in the meantime , looking for some action, I'll soon be trying silver (SLW) on this pullback for a few days.




EWZuber
1,373 posts
msg #60620
Ignore EWZuber
3/18/2008 5:28:21 PM

nikoschopen
"...The problem with that approach is that by the time you analyze and absorb all the information derived from different indicators/oscillators/squigglies, ure prolly late to the scene..."

Not at all. Everything is laid out, all that is needed is the bounce up off the 10MA, in whatever time frame is being used, and a simultaneous stochastic +Xover. It's the same set up every time.
But careful attention must be paid before hand to get a solid position. Resistance and support must be established along with any patterns that have formed.
No doubt about it, it takes focus, but its the groundwork that is laid out for the trade that pays off when the moment arrives.
With discipline, this can easily be done with time frames a fast as the 1 minute chart.

EWZuber
1,373 posts
msg #60621
Ignore EWZuber
3/18/2008 5:39:11 PM

rtucker, many times it is not wise to 'hold longer than the first price swing'.
I believe that if a sell signal occurs in the time frame in which the trade was made, then that must be acted upon.
Many of the recent market moves have reversed on themselves and anyone holding on to a position longer than the first cycle could soon find a nicely profitable position in the hole.
As long as pattern supports holds then it is a viable posiotion to hold, IMO.
But as soon as that support is violated then it must be closed. This strategy will not necessarily net you the greatest return in market conditions like these. Selling at resistance has lately been the more profitable strategy since the market has been in a consolidation pattern.


rtucker
318 posts
msg #60623
Ignore rtucker
3/18/2008 8:00:09 PM

Zub,

In my recent readings, the trend following system developers/traders try to quantify their edges in entries and other things..

Crunching 1996-2006 data on most liquid markets they found that beakout entries have a negative edge for the 1st 5 days. The Max Adverse Movement MAE exceeds the Max Favorable Movement MFE for 5 days .

This is no big revalation as we could all probably prove this on SF in an hour

Even though their stops, say 1.5 - 3 ATR ,and, their exit signals such as "close < bottom channel" remain, and, characterize a trend trading system , "some" will try to get a positive entry edge by implimenting a countertrend "ie: 3 down days then buy" entry after the breakoput occurs.

What is intereting though is that MFE/MAE crosses 1 after 5 days and
by 125 days, by just adding one enty "indicator" of ma(50) is above ma(350) , then MFA/MAE = 1.6

In othe words, dont miss the move but try for a better entry. Hence the mixing of entry and exit timeframes. They may use a swing time frame entry but they are in it until the trend ends.

You hit the main con of trend trading on the head. " Who can stand in there and give back so much profit"? They have a low win % , say 35%,
but hit homeruns letting winners ride.


Imagine though, how these pros, "Dunn,Henry,Seykota etc.." are doing in these times with many of these markets........ metals, grains, dollar, rates, $SPY etc.. trending so strongly.

My only point in all this was is including the longer term stategies as just as "valid " as day and swing trading and pointing outsome of the indicators they use.

PS: "The way of the Turtle" , Curtis Faith and "Trend Trading", Michael Corvel are my source of info.

Anyone else have trend trading books to reccomend?



zeezeetop
30 posts
msg #60624
Ignore zeezeetop
3/18/2008 8:33:21 PM

Let me say this about that. When Chuck Yeager flew his first supersonic flight he noticed that the controls acted opposite of subsonic flight. The same appears to be true of high volitility.

In my humble opinion, you play the market differently during different periods of volitility, Has anyone else observed this trend or do you have rules for trading in different environments?

jrbikes
624 posts
msg #60625
Ignore jrbikes
3/18/2008 10:11:31 PM

Volume
Price
Support and Resistance





StockFetcher Forums · General Discussion · what indicators do you find the most powerfull?<< 1 2 3 4 5 >>Post Follow-up

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