The best T/A indicators

[benn]

I think he wants them handed to him on a plate.

haha. nah of course i dont want them handed on a plate. this has been good reading. i was trying to say that when i had someone go through an excel sheet of the coppock indicator i was amazed at its accuracy and that i intend to use it from now on.

I realise i need some technical indicators for share purchases as this past year i have been throwing good money after bad as the stocks continue down.
"I really should wait till the t/a indicators turn up before buying more stock", i thought to myself as the light bulb turned on.

So just wanted to see if there were any other tried and tested indicators that are basic but get the job done for a time poor long term investor who's a newbie in his low 20's. Made 150k from margin loans back in the boom period then lost most of it not knowing when to get out.

Which brings me to my other concern. The coppock apparently was designed for long term investors and signals the time to buy at the end of a bear market. What sort of signals/indicators are out there for when to EXIT? ie. liquidate your entire portfolio as something bad might be out there. My thoughts after this year is get out of every stock when there are the first signs of a US recession after a bull run.

 

[It's Snake Pliskin]

haha. nah of course i dont want them handed on a plate. this has been good reading. i was trying to say that when i had someone go through an excel sheet of the coppock indicator i was amazed at its accuracy and that i intend to use it from now on.

I realise i need some technical indicators for share purchases as this past year i have been throwing good money after bad as the stocks continue down.
"I really should wait till the t/a indicators turn up before buying more stock", i thought to myself as the light bulb turned on.

So just wanted to see if there were any other tried and tested indicators that are basic but get the job done for a time poor long term investor who's a newbie in his low 20's. Made 150k from margin loans back in the boom period then lost most of it not knowing when to get out.

Which brings me to my other concern. The coppock apparently was designed for long term investors and signals the time to buy at the end of a bear market. What sort of signals/indicators are out there for when to EXIT? ie. liquidate your entire portfolio as something bad might be out there. My thoughts after this year is get out of every stock when there are the first signs of a US recession after a bull run.

Re: red points:
1. Do you know how it is constructed and what it is used for? And is that use correct or just what the default majority say?
2. Why?
3. Try many hours of understanding the markets first. Not only watching or reading charts regardless of time frame, but also researching a lot.

 

[Naked shorts]

Which brings me to my other concern. The coppock apparently was designed for long term investors and signals the time to buy at the end of a bear market. What sort of signals/indicators are out there for when to EXIT? ie. liquidate your entire portfolio as something bad might be out there. My thoughts after this year is get out of every stock when there are the first signs of a US recession after a bull run.

You should already have an exit point before you enter your trade.
Ever heard the cliche, "plan your trade, trade your plan".

Once you get better and better, you can start cutting off loosing trades because you will know through experience that you will keep losing if you stay in.

 

[kam75]

Indicators are useless, they look good on historical charts but trading the hard right edge your way behind the ball with indicators, you only need price action, support, resistence, trend, volatility and how a stock reacts to news to gauge good entry points, also fade big moves on light volume, you will never meet a millionaire trader who uses indicators its just the reality.

On Balance Volume when combined with the action of price can at times be a very effective, leading indicator. For example, if price is going sideways in a congestion zone but OBV is rising, you know that the next move is likeky to be a breakout to the upside.
regards

 

[Naked shorts]

lol I just thought up a new indicator. I wrote up a formula for it and gave it a name....i have since found out it already has a name. VSA

 

[MRC & Co]

lol, you can't apply a formula to VSA and it's not an indicator as such.

It's an entire array of analysis on it's own.

Benn, if you wait until most indicators 'turn up', you will probably be buying the lower high.

 

[Naked shorts]

lol, you can't apply a formula to VSA and it's not an indicator as such.

It's an entire array of analysis on it's own.

Well thats good, I can go back and name my own indicator:

 

[MRC & Co]

Well thats good, I can go back and name my own indicator:

You sure can. Release it to the retail market, show some examples of when it has worked and convince them it's the grail. Sure to get some excited and some who actually make some money off it, who will then go and spread it to the rest of the worthy followers, ready to be enlightened!

Disclaimer: Indicators, like anything in trading, have their moments they work and their moments they don't. Determining when they work or not or finding a way to profit out of it (positive expectancy blah blah), is the riddle.

 

[Naked shorts]

You sure can. Release it to the retail market, show some examples of when it has worked and convince them it's the grail. Sure to get some excited and some who actually make some money off it, who will then go and spread it to the rest of the worthy followers, ready to be enlightened!

Disclaimer: Indicators, like anything in trading, have their moments they work and their moments they don't. Determining when they work or not or finding a way to profit out of it (positive expectancy blah blah), is the riddle.

Im working on my seminar and book right now:

 

[MRC & Co]

Im working on my seminar and book right now:

ha ha, good work! You will probably make more than us traders!

On another note, one reason I like pure price action, as opposed to traditional TA or indicators, is you can simply view past charts in your timeframe and look for reliable patterns. You will then know what you are looking for in the trade and see what has been reliable lately. The markets and their price action are always changing, have to keep up with recent patterns IMO.

One example lately, look for the SPI to fall, form a bearish flag, then rally hard (simply a bull trap or squeeze), taking out all weak shorts, before it will then go on and continue it's merry way down.

I like to call it my BS flag fall off cliff indicator.

Sometimes you see it with a rounding top too, but they are more simple legit rounding tops these days.

Oh, can't recall seeing these in a book either. Maybe if I read some more books...............?

 

[Naked shorts]

I like to call it my BS flag fall off cliff indicator.

lol hahaha, how many times did it catch you out before you caught on? (I can sense pain/anger/omfgwtf in that name)

 

[MRC & Co]

lol hahaha, how many times did it catch you out before you caught on? (I can sense pain/anger/omfgwtf in that name)

Don't think it caught me out much at all. It's pretty quick to notice, you just look for any kind of BS move and fade it.

 

[MichaelD]

"I really should wait till the t/a indicators turn up before buying more stock", i thought to myself as the light bulb turned on.

What sort of signals/indicators are out there for when to EXIT?

Hmmm - we have almost come full circle, have we not? What is it that more-or-less all technical indicators are derived from?

Exits are very good indeed to think about - there is much to read here at ASF on exits.

Here's some basic trading rules that are universally applicable. Figure how to trade in a way compatible with these rules and you will do much better;

1. Price going up = Buy, Price going down = Sell.
2. Let your winners run and cut your losers short.

There you go - the holy grails of trading, almost totally ignored by most traders to their peril.

 

[MRC & Co]

1. Price going up = Buy, Price going down = Sell.
2. Let your winners run and cut your losers short.

There you go - the holy grails of trading, almost totally ignored by most traders to their peril.

Yep, but I would add, know the difference on when to let your winners run and when to tighten up stops to lock in profits.

This can be done by fragmenting your lots (taking some off the table as your trade goes into profit) and/or using simple trend structure. Trend structure can be viewed over on thechartist.com.au in the free materials section.

Link: http://www.thechartist.com.au/papers/Jan_06.pdf

 

[amory]

Benn: "Which brings me to my other concern. The coppock apparently was designed for long term investors and signals the time to buy at the end of a bear market. What sort of signals/indicators are out there for when to EXIT? ie. liquidate your entire portfolio as something bad might be out there. My thoughts after this year is get out of every stock when there are the first signs of a US recession after a bull run."

if you believe in your indicator(s) then the time to exit would work on the same principle .. upbreak/downbreak.

I have spent an hour backtesting the Coppock on BHP, using the formula previously posted, on daily/weekly & monthly basis. came to the conclusion that it works best on weekly if its longterm signals you are after. ignoring fluctuations & only going by when it breaks up or down thru zero, it would have got you out of BHP around $40 in early july & no re-entry since then.

but the levelling-out & mild downturn from the top would have got you out in the mid-forties, a month earlier! currently, its in an upturn but nowhere near that all-important break thru zero.

that's on the weekly .. on the daily, the signals are more frequent but less convincing. one will have to do some more work on that, testing it against a few other stocks & indices.

and by the way, that's quite good advice from MRC & MichaelD! one will have to think about that too.

 

[wayneL]

Are cab drivers considered T/A or F/A? :

 

[barney]

Are cab drivers considered T/A or F/A? :

Definitely F/A, cause most of them don't use "indicators"

Good to see you back Wayne

 

[It's Snake Pliskin]

Benn: "Which brings me to my other concern. The coppock apparently was designed for long term investors and signals the time to buy at the end of a bear market. What sort of signals/indicators are out there for when to EXIT? ie. liquidate your entire portfolio as something bad might be out there. My thoughts after this year is get out of every stock when there are the first signs of a US recession after a bull run."

if you believe in your indicator(s) then the time to exit would work on the same principle .. upbreak/downbreak.

I have spent an hour backtesting the Coppock on BHP, using the formula previously posted, on daily/weekly & monthly basis. came to the conclusion that it works best on weekly if its longterm signals you are after. ignoring fluctuations & only going by when it breaks up or down thru zero, it would have got you out of BHP around $40 in early july & no re-entry since then.

but the levelling-out & mild downturn from the top would have got you out in the mid-forties, a month earlier! currently, its in an upturn but nowhere near that all-important break thru zero.

that's on the weekly .. on the daily, the signals are more frequent but less convincing. one will have to do some more work on that, testing it against a few other stocks & indices.

and by the way, that's quite good advice from MRC & MichaelD! one will have to think about that too.

Good post Amory,

With your testing of the daily time frame what issues do see limiting using the coppock? You said less convincing - what do you really mean by that?

 

[It's Snake Pliskin]

Are cab drivers considered T/A or F/A? :

Don't tell anyone they call talk back radio

 

[amory]

Good post Amory,

With your testing of the daily time frame what issues do see limiting using the coppock? You said less convincing - what do you really mean by that?

Thank you Snake. Less convincing simply means (a) it doesn't always work or (b) it doesn't work well using (bi) a specific time frame or (bii) using the bend at the top or bottom, rather than the actual breakthru zero which is supposed to be the crucial point.

Coppock has been discussed on various forums & there are definitely some investors who wouldn't leave home without it. I have recently posted a Metastock formula, if you haven't seen it I'll be happy to post it here.

"The best T/A indicators" as per the title of this thread, needs definition. certain indicators may be foolproof watertight ... but they are not always the fastest. others ... Macd, RSI etc ... give you really early warning, but is it always reliable?

another thing you've got to consider: do you want to work with for instance RSI (10) or (15) or (20) ... you will get different results! likewise if you vary the timing of the signal-line ... that's the one showing where the vital breakthru is going to be.

just summing up then: Coppock break-thru zero on the weekly chart is as good a medium term indicator as any ... I hope.