# Your favourite TA indicators for identifying an entry into a stock?



## gamefisherman (3 December 2009)

I thought it might be a good idea for people to post their favourite TA indicators for identifying an entry into a ASX stock....(NOT SHORTING please), and what conditions must be met for you to enter. Time frame to hold can be for as little as a week or medium term..........

Please add in a chart to show an example if you can. 

Please post:
1. What indicator/s you use, please provide details of if it is daily, weekly, or monthly chart/s or a check of all of them
2. Why you use this particular TA combination?
3. Do you double check the entry with another set of indicator/s and if so which ones?
4.Why do you use this particular combination?
5. When would you get out of the trade and why, which indicators would you use to confirm an exit, or would you have a predetermined profit that you would be happy with......

I would be most grateful to those who share their favourite system.....if possible so others like me who are still refining TA, please keep it as simple as possible.....

I hope that this post will be one where many including those already using TA and those hoping to gain more knowledge can come and look at the different ideas used by people, then be able to practice putting them into action and then making some $$$$$$.........

Thank you and I hope many contribute and many read.........In anticipation......best wishes


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## lukeaye (3 December 2009)

*Re: what are your favourite ta indicators for identifying an entry into a stock?*



gamefisherman said:


> I would be most grateful to those who share their favourite system.....if possible so others like me who are still refining TA, please keep it as simple as possible.....
> 
> I hope that this post will be one where many including those already using TA and those hoping to gain more knowledge can come and look at the different ideas used by people, then be able to practice putting them into action and then making some $$$$$$.........
> 
> Thank you and I hope many contribute and many read.........In anticipation......best wishes




Im sure you would be thankful. The thing is that sort of information is the sort of information you either need to;

(a) Pay for
(b) find yourself

You cant expect people who have done the hard work to give away their techniques for free.

Any information you receive for free will mostly probably be wrong.

Not trying to be a smart ass just stating the truth


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## gamefisherman (3 December 2009)

*Re: what are your favourite ta indicators for identifying an entry into a stock?*

Hi lukeaye

Thank you for you post. Yes you are right, this is the sort of information that you need to discover yourself............100% correct, hence this post.

However in relation to your overall post, imho there are multiple truths so there just might be some good people out there whom are interested in knowledge sharing which is what this website is all about. Its all about your own beliefs and character. There will be those who wish to share and others whom wish to not participate. And I respect that. If only a couple of posts are made and I and others are able to learn something then I think the consensus would be great, and people would be grateful for the shared knowledge and exchange of ideas.

Best wishes






lukeaye said:


> Im sure you would be thankful. The thing is that sort of information is the sort of information you either need to;
> 
> (a) Pay for
> (b) find yourself
> ...


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## lukeaye (3 December 2009)

*Re: what are your favourite ta indicators for identifying an entry into a stock?*



gamefisherman said:


> Hi lukeaye
> 
> However in relation to your overall post, imho there are multiple truths so there just might be some good people out there whom are interested in knowledge sharing which is what this website is all about.
> Best wishes




The other common misconception is that you can just throw a strategy at anything and it will work.

I can give you a strategy, but unless you apply it in the right context, ie timeframe, stock, sector, indicie, trend so on you will never make it work. 

You need to adapt your own strategy to your own dynamics. Nothing i tell you, or anyone else tells you is likely to help you if you don't know how to apply it.


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## Wysiwyg (3 December 2009)

*Re: what are your favourite ta indicators for identifying an entry into a stock?*



lukeaye said:


> Im sure you would be thankful. The thing is that sort of information is the sort of information you either need to;
> 
> (a) Pay for
> (b) find yourself
> ...



I agree Lukey. After exhaustive trials and errors I wouldn't reveal what works best for me.


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## gamefisherman (3 December 2009)

Here is one example of a trading system that I have worked through and are currently looking more into.............please see chart attached........

Cheers


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## sammy84 (3 December 2009)

Gamefisherman that last system seem to purely be curve fitting. Good luck anyway with it, I hope you prove me wrong.


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## lukeaye (3 December 2009)

gamefisherman said:


> Here is one example of a trading system that I have worked through and are currently looking more into.............please see chart attached........
> 
> Cheers




As a simple long term investment tool i can't say it doesnt work. But try using that as a short term tool, using CFD's or options and watch yourself come undone.

You have to think, you are trying to take other peoples money, effectively for you to make money somebody has to lose money. If that system works, why doesnt everyone else do it? Unfortuneatley it just isnt that simple.

Moving averages are a perfect hindsight tool. So how many times has that cross given you a positive expectancy over the last 40 years, and over how many stocks? Its great seeing it worked before, but will it work in the future?
maybe the dynamic will change to a 40 period, maybe it will change to an 80 period. You have to know what moving average is best optimised for that stock.


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## skc (3 December 2009)

gamefisherman said:


> I thought it might be a good idea for people to post their favourite TA indicators for identifying an entry into a ASX stock....(NOT SHORTING please), and what conditions must be met for you to enter. Time frame to hold can be for as little as a week or medium term..........
> 
> Please add in a chart to show an example if you can.
> 
> ...




The favourite TA is the retracement swing trade when they coincide with Fib retracement levels. There is a whole thread (not started by me) on this in the forum... see if you can find it.

Unfortunately it is not indicator based so not readily programmable.


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## professor_frink (4 December 2009)

gamefisherman said:


> I thought it might be a good idea for people to post their favourite TA indicators for identifying an entry into a ASX stock....(NOT SHORTING please), and what conditions must be met for you to enter. Time frame to hold can be for as little as a week or medium term..........
> 
> Please add in a chart to show an example if you can.
> 
> ...




here's a freebie from the marketsci blog. IMO marketsci is one of the most interesting blogs on the net, and one of my personal favs. Well worth spending some time going through and reading as much of it as you can if you want some new ideas

Basic jist is to buy when the 4 period CCI dips below -100 and then exit when it closes above 0. Another way of putting that is it's buying short term dips away from the 4 period moving average and seling when it crosses back above it.

Below chart showing signals for the s&p500. 9 completed trades, 7 winners(kind hard to do any worse than that this year as pretty well every dip has been bought up big making everyone look like a genius!)

 I haven't tested this on any ASX stocks so can't say what it would perform like, but would guess it won't quite work as well on the ASX as the US markets.

Not recommending this as a standalone system, just thought I'd throw it in here to see if it gets people thinking a little. That and I really like the marketsci blog and wanted to give it a free plug


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## Sean K (4 December 2009)

I buy when the EW thread says sell.


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## brty (4 December 2009)

My TA uses things like 'meandering', 'relatively slowly', 'good support', 'poor support', 'good resistance', 'poor resistance','volume support', 'volume resistance' and a number of other simple, but un-programable characteristics.

brty


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## lukeaye (4 December 2009)

kennas said:


> I buy when the EW thread says sell.




Thats not so silly.

I find buying when bloomberg is very doom and gloom is a good indicator


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## Boggo (4 December 2009)

gamefisherman said:


> Please post:
> 1. What indicator/s you use, please provide details of if it is daily, weekly, or monthly chart/s or a check of all of them




You are not buying or selling an indicator, indicators are useless unless they are telling you something.
What pattern, trend or breakout etc are you looking for ?
Once you work out what you are looking for then you can modify the indicators provide a heads up to that situation on any stock.

I run two different Metastock scans based on indicators, I don't see the indicators, I just know that when the stock appears in the search results it has met my formula combination behind the scenes.
One indicator may provide a signal today and another may do the same tomorrow, seldom do they all cross together.

ASL appeared on the last two nights and I may get another tonight just by looking at the shape of another indicator.
In reality I never actually look at the indicators, just the pattern that I am hoping to find and a glance at the volume behaviour is all I need.
Unlike Elliott Wave there is no skill or study required, just scan and glance.

Example pic below is of the indicators all crossing fairly close together on HGO resulting in a signal on Tue night, note the volume if you look at the chart and note past crossovers in relation to price pattern.
My opinion, you must know what you are looking for and then modify the indicators to identify it.
.


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## Boggo (4 December 2009)

Example of what I see when I open a chart that has appeared in the scan results.


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## gamefisherman (4 December 2009)

Thank you to all those who have posted.........I have already learned alot from your comments.....Over the weekend I will go through each post and make notes and might have some questions.......

Much appreciated....


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## cutz (4 December 2009)

FWIW,

The best thing i've done is thrown TA out the home office window, most indicators are hindsight thingies and probably won't enhance your profitability.

IMO not bothering with fancy indicators is the way to go.

:hide:


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## beerwm (4 December 2009)

cutz said:


> FWIW,
> 
> The best thing i've done is thrown TA out the home office window, most indicators are hindsight thingies and probably won't enhance your profitability.
> 
> ...




^ well put


you really want to trade a 'concept' rather than a set of indicators.

for example,

Trend Following:

ive thrown out all the trend-like indicators [moving average/macd] and just coded a simple 

- change in price/[over]/time period. adjusted by volatility

as Trends are defined by 'price action' and not by indicators


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## Wysiwyg (4 December 2009)

beerwm said:


> as Trends are defined by 'price action' and not by indicators



 Yes the price action determines the trend but it is hard to deny that a rising MACD histogram is an indication of a rising price. I have drawn through the vertical lines from the bottom of the histogram to the price as an example.


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## skc (5 December 2009)

Wysiwyg said:


> Yes the price action determines the trend but it is hard to deny that a rising MACD histogram is an indication of a rising price. I have drawn through the vertical lines from the bottom of the histogram to the price as an example.




That's what indicator means... they indicate. So no one can argue MACD histogram is an indication of a rising price. But you don't need the MACD histogram to judge it was a rising price chart. The higher highs and higher lows tell you that straight away.

And as we know it is not a predictive tool. So you don't know what will happen next. The current histogram will keep getting lower until the price turn back up. At that time the histogram will put in a low point to indicate the price change AFTER the event has taken place.

I just don't know of what use is that information.


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## Wysiwyg (5 December 2009)

skc said:


> That's what indicator means... they indicate. So no one can argue MACD histogram is an indication of a rising price. But you don't need the MACD histogram to judge it was a rising price chart. The higher highs and higher lows tell you that straight away.



 Yeah for sure. Take away the indicator and the price still rises.



> And as we know it is not a predictive tool. So you don't know what will happen next. *The current histogram will keep getting lower until the price turn back up.* At that time the histogram will put in a low point to indicate the price change AFTER the event has taken place.
> 
> I just don't know of what use is that information.



Well there you are wrong. If you look closely at the histogram you will see the bars (on the circled histograms) become shorter before the price moves.  

A closer view can be obtained by clicking on the chart and then again.


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## Boggo (5 December 2009)

Wysiwyg,
 the histogram on an MACD is an indication of the spacing between the two averages using zero as the crossing or neutral reference.
The crossing of the zero line is usually a confirmation of a trend in the opposite direction can be a significant indicator in itself, and yes, the movement away from the extreme on the histogram is a precursor to the zero crossover.
An understanding of divergence and convergence can be a useful when using the MACD and price extremes.

Stocks such as AEC with low volume can swing around very easily or are easily influenced by a few large trades in either direction and consequently the indicators can fluctuate quite a bit.

A well set up group of indicators can provide a good basis for a scan or search function that can reveal a number of _*potential*_ trades on a fairly regular basis.

Out of interest open a few charts such as BOQ, TOL or even CNX which is relatively cheap but has a stable daily volume and note the price action either way at the crossover (zero) point on just that MACD indicator.

Just my


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## Wysiwyg (5 December 2009)

Boggo said:


> Wysiwyg,
> A well set up group of indicators can provide a good basis for a scan or search function that can reveal a number of _*potential*_ trades on a fairly regular basis.
> 
> Out of interest open a few charts such as BOQ, TOL or even CNX which is relatively cheap but has a stable daily volume and note the price action either way at the crossover (zero) point on just that MACD indicator.
> ...



I checked BOQ and still believe my eyes telling me that a below zero low on the histogram is an early entry into a long position. On an up trending stock I wouldn't short sell the tops because they have a tendency to have more than one mound.

The crossovers are way late don't you think? I wonder if a formula can detect stocks that have just begun to rise on the histogram? The next histogram bar after the low.


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## r22mark (5 December 2009)

Take the time, learn to code. That way you can backtest whatever system you dream up. Including evaluating indicators.

Mark


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