A somewhat smaller supposition that I know nothing of price action. And yes all derivations of price computated constitute the basis of an oscilating indicator.
A true expert will know why. The various tools will be used when and where required. Watching bar by bar only, has its limitations.
Your final sentence highlights the ignorance of and disregard to various strategies and tactics that price action (bar by bar watching) alone will not assist you with at times.
Snake,
I am interested in hearing the general methods you use as I have never seen your ideas..........
I know you don't want to share details, this is why I have stated, general methods.
Generally divergence set ups, exhaustion, patterns, trendlines
I'm still waiting to hear what indicators show that the chart (i.e. price action) does not.
I'm still waiting to hear what indicators show that the chart (i.e. price action) does not.
Looks like you forgot that indicators are based off of price action:. The true expect will only use what he needs and no more. If the indicators are based on price action and one can read price action well, then there's no need for indicators.
I didn't say indicators weren't useful - they are, but as visual aids. Divergence is shown on a chart. It may not be immediately obvious, but it is there. It's the same information, just shown a different way. Anything shown on an indicator is also shown on the chart, it's just a matter of whether the trader can spot it on the chart or with the indicator.
A true expert will understand
before discounting methods
So you admit that indicators are useful but shouldn't be used even if they help the trader read the price action with more ease? Which is the idea behind an indicator, isn't it?
The OP has stated he is a beginner, so wouldn't he be better served by learning about indicators
Doing this may also help the OP understand what the price action is actually saying and how best to take advantage of it.
Tomorrow night i'm going to do the exact opposite of what i did tonight. How can i go wrong??
hi TH, i like what you say about an understanding the markets being central to designing a system and im interested in your suggestions as to how one furthers their knowledge and learns more about this?
is it reading? is it practical experience? how does someone with a thirst for this knowledge begin on the long road to acquiring it?
Its a pretty big question and I haven't much time at the moment but,
You have to know what to expect from the market you trade. you have to know what sort of ranges are likely and what sort of day you have ahead of you. So if you are an index futs trader you need to know things like avg daily and avg 15 min ranges. Its no good trading for 100 ticks on a slow range bound day, especially after for example 3 large range days in the same direction.
Its no good having 30 tick profit target if your holding trades for 15 minutes and the ATR(15) is 12 ticks.
Its no good looking at the double bottom and support on the SPI and going long if the HSI opens down 3% and currency are getting smashed against the USD.
Its silly to go long on the open when the SPI gaps up to R2 on the open because its got a 60% chance of hitting R1 before R3.
Its a bit hard to cover everything but the problem I see people making is they think TA "works" and want to apply it. What works is looking and expecting the right things at the right time and knowing when the market/s are & aren't acting as expected.
Use TA to trade what you expect not to tell you what to think. (that's my approach anyway)
i like what you say about an understanding the markets being central to designing a system
how one furthers their knowledge and learns more about this?
But you said this:I didn't say indicators weren't useful - they are, but as visual aids. Divergence is shown on a chart. It may not be immediately obvious, but it is there. It's the same information, just shown a different way. Anything shown on an indicator is also shown on the chart, it's just a matter of whether the trader can spot it on the chart or with the indicator.
And you said this:If the indicators are based on price action and one can read price action well, then there's no need for indicators.
And this:They're useful if you can't readily see that info on a chart, but that doesn't mean you shouldn't try to see it on the chart.
Finally:I focused on the price action rather than the indicators. I do believe that indicators can be misleading and that it is better to go straight to the source
So naturally any indicator derived from price is going to be of some help if not just a little. All the information is in the chart right?The only absolute I'm bringing to this thread is that the information shown by indicators is already in the chart.
I'm not interested in an argument and just highlighting what seems to be contradictory
And I would love to see how a divergence can be seen without an oscillator and just price bars or candlesticks
just as one system doesn't work in all markets
If the market is in a strong trend eitherway then an MA will be more likely to assist.
And I would love to see how a divergence can be seen without an oscillator and just price bars or candlesticks.I am genuinely interested in this.
Oh, I see you are talking about exhaustion and not divergence. If only using price bars then there can be no divergence. I see now.Divergence is simply situation where a move is running out of puff, and this is quite visible in real-time. It's obviously not as clear as identifying where stochs would be 'oversold' or 'overbought', but it's there.
A more concise description of my view on indicators, so there's no confusion:
1. They can be useful, but they are not necessary.
2. They show the same info a chart shows. It may or may not be hard to see this info on the chart.
3. Many people rely too heavily on indicators, particularly when they start trading.
4. Focus on indicators can take focus away from studying movement itself.
5. Dumping indicators altogether may be a very useful exercise.
Snake its pretty easy to see what would be divergence on an chart without an indicator. In fact it is not divergence. Its just running out of steam with each cycle higher or lower. Divergence is the representation in the indicator. loss or reduction of momentum on each trust is the actual cause you are plotting.
So you would get prices cycles like up 100, down 20, up 70, down 25, up 40, down 18, up 25.
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