Trading Indicators Are Useless

[soultrader]

Im talking about data. IMO the bulk of the money spent in trading is for TIME and EDUCATION. Data is data. Speed maybe the only differentiating factor.

Oh thats right the expensive is always the best??
Ok then tell me whats the most expensive equipment for trading?
Maybe what Brian Hunter used? How much does that cost?

Im talking about paying for all data fees as well. And using a good trading platform.

Do you recommend trading on a weak platform with level 1 quotes and a 258 ram computer? NO.

At least invest in a stable fast computer with at least 2 monitors (although I prefer minimum 4). Get at least 1 gig in ram and pay for cbot,cme,nyse,etc... fees. I have used several trading platforms in the past and some are unbelievable crappy. An example of a powerful platform is Tradestation. I absolutely love it.

PS. Who's Brian Hunter?

 

[wayneL]

Stick with a solid platform and data. There is no need trying to be cheap on data fees when trading.

Thats something I dont understand... if you are risking a large sum of money in trading, why dont you want the best equipment, connection, and data? You are risking alot of money just to save a few bucks?

In principle agree. But depending on the purpose, free data is fine.

I happily pay for good futures historical and EOD data.

But for stocks EOD analysis I use Yahoo and for that purpose it's quite alright. If I want a closer look, I'll use live data from IB... also free if a customer.

For Aussie stocks I would definately cough up for accurate EOD though... not enough history from yahoo. As I don't trade the ASX it's fine for me just to keep track of whats happening.

Cheers

 

[soultrader]

In principle agree. But depending on the purpose, free data is fine.

I happily pay for good futures historical and EOD data.

But for stocks EOD analysis I use Yahoo and for that purpose it's quite alright. If I want a closer look, I'll use live data from IB... also free if a customer.

For Aussie stocks I would definately cough up for accurate EOD though... not enough history from yahoo

Cheers

Isnt yahoo data delayed?

 

[wayneL]

Isnt yahoo data delayed?

Yep,

But for live I have IB

I use the Yahoo for EOD on stocks

 

[wayneL]

Im talking about paying for all data fees as well. And using a good trading platform.

Do you recommend trading on a weak platform with level 1 quotes and a 258 ram computer? NO.

At least invest in a stable fast computer with at least 2 monitors (although I prefer minimum 4). Get at least 1 gig in ram and pay for cbot,cme,nyse,etc... fees. I have used several trading platforms in the past and some are unbelievable crappy. An example of a powerful platform is Tradestation. I absolutely love it.

PS. Who's Brian Hunter?

James,

Do you use Tradestation as your broker as well?

 

[nizar]

OK it seems premium data is pretty good. 12 years historical.
Every1 else asking for $50/month.

Wayne is AmiBroker better than MetaStock (end of day) in terms of what they can do and user-friendly?

Im trying to work out why AmiBroker is so cheap....

Im only keen on end-of-day trading at the moment... no time for intraday...

 

[soultrader]

James,

Do you use Tradestation as your broker as well?

No I dont... TS execution is a little slow. I prefer to use Infinity. But the charting software for TS in my opinion is the best.

I might place a couple swings with TS but all intraday trades are not done through TS.

TS platform fees are free if you place more than 5 or 10 roundtrips a month.

 

[wayneL]

OK it seems premium data is pretty good. 12 years historical.
Every1 else asking for $50/month.

Wayne is AmiBroker better than MetaStock (end of day) in terms of what they can do and user-friendly?

Im trying to work out why AmiBroker is so cheap....

Im only keen on end-of-day trading at the moment... no time for intraday...

I have both (though only version 7.2 metastock)

Both have their advantages over each other, but I prefer Ami. When price is factored in, it's no contest. AB hands down... particularly if using live data. But if using live data, check on compatibility.

Cheers

 

[wayneL]

No I dont... TS execution is a little slow. I prefer to use Infinity. But the charting software for TS in my opinion is the best.

I might place a couple swings with TS but all intraday trades are not done through TS.

TS platform fees are free if you place more than 5 or 10 roundtrips a month.

TS charting software certainly has an excellent reputation.. I'm surprised their platform is slow... but there you go.

Cheers

 

[swingstar]

OK it seems premium data is pretty good. 12 years historical.
Every1 else asking for $50/month.

Wayne is AmiBroker better than MetaStock (end of day) in terms of what they can do and user-friendly?

Im trying to work out why AmiBroker is so cheap....

Im only keen on end-of-day trading at the moment... no time for intraday...

Download the trial. I don't think there's any time limit, but you can only use the default database afaik.

 

[soultrader]

TS charting software certainly has an excellent reputation.. I'm surprised their platform is slow... but there you go.

Cheers

Platform is fast... just the execution system. Its not much of a big deal but for a tape reader every split second counts

 

[WaySolid]

Some interesting points made James, agree with many of them.

I'm careful of blanket statements regarding trading though, firstly a statement like 'all trading indicators are useless' is setting yourself up for a whack as all we need logically is for one to work to prove you wrong.

Firstly I consider indicators such as COT and sentiment indicators to be different to those derived from price only, perhaps there are some other catagories as well.

I'd say you are fairly comprehensively proven wrong by the success of trend following strategies over the course of history, Covell covers this in his book 'Trend Following'. Like it or not at their core they are mechanical indicator based approaches.

Also I'm not sure how a person groups someone like James Simons from Renaissance Technologies who is a convincing example of superior returns using a quant approach. To me anything you can get a bot to do is indicator based as well.

It's actually a silly statement that 'all indicators are useless' when you think about it, better to leave it out all together and proceed with other arguments.

Just commenting as I like jumping on trading cliches, and I have heard this one many times before.

** edit.. And it would be Kasparov who got the publicity from playing the computers from IBM. Kramnik is due to play a match soon against the latest commercially available release, he rates himself as having 'some chance'. Karpov was never very good using computers or playing against them, he is not now even in the worlds top 100, and Kasparov has retired to try his hand at Russian politics (at the moment he is still alive).

 

[soultrader]

Trend based systems do work. I agree. But this is based on a longer time frame.

The holding period of any financial instrument is decreasing each year. I think Oliver Verez mentioned this as well.

Soon, a 3 day holding period will be considered long. This is definitely going to affect a trend based system.

In intraday trading especially in the futures market, indicators are pretty useless. Show me a profitable intraday system based futures trader and I will be proven wrong.

 

[sails]

Stick with a solid platform and data. There is no need trying to be cheap on data fees when trading.

Thats something I dont understand... if you are risking a large sum of money in trading, why dont you want the best equipment, connection, and data? You are risking alot of money just to save a few bucks?

Totally agree with you, and I pay for live data (includes intraday), however, I haven't been able to export it into metastock format for other EOD software - so Yahoo is fine for that purpose.

 

[nat]

Incredible charts i find is fine for stocks and can take yahoo data now,as well ,hourly updates and historical data to around 14 years worth .Its free if get the 18 hours delayed version otherwise premium is 180$ a year .Nathan

 

[soultrader]

I actually pay over $200 a month just on data fees. Exchange fees plus third party market profile charting.

 

[MichaelD]

Does any1 know any cheaper EOD data + historical?
Premiumdata is about $550/year
$35/month EOD and historical 12 years $90 once off

Nizar,

Don't skimp on your data. It is an unwise way to save money. Your entire trading/investment plan revolves around what your data is telling you.

Free data is not adjusted for things like capital returns making it inaccurate for trading decisions. As an example, look at a 3 month chart of AUN on Yahoo. This shows a drop in early September which shouldn't be there. Consider if you'd made a trading decision based on this inaccurate data.

 

[sails]

I actually pay over $200 a month just on data fees. Exchange fees plus third party market profile charting.

James, what software do you use for market profile?

 

[Shane Baker]

Trend based systems do work. I agree. But this is based on a longer time frame.

The holding period of any financial instrument is decreasing each year. I think Oliver Verez mentioned this as well.

Soon, a 3 day holding period will be considered long. This is definitely going to affect a trend based system.

In intraday trading especially in the futures market, indicators are pretty useless. Show me a profitable intraday system based futures trader and I will be proven wrong.

Perry Kaufman does a good job of explaining the difference between noise and a trend. As markets become more noisy, the trend length needs to be longer to capture the trend. True trends are usually fundamentally based eg interest rate cycles, supply demand, macroeconomic capital flows etcetc. These by their nature are longer term. This is why for most markets looking at the longer timeframe removes some of the noise component and can clearly identify the trend if present.

Cheers

Shane

 

[soultrader]

James, what software do you use for market profile?

I used to use esignal. A friend of mine just made a MP indicator for Tradestation this month so I am going to be using TS now. Saves me around $140 a month.