Which two indicators would you use?

[Mr J]

As an example in business we dropped all projects under $7K so we complete a lot less projects--our average project price has gone from 12K now to $56K (8 yrs latrer).

It's harder to do this with trading since there is far less confidence in the level of profitability of any individual trade. Anyway, the only reason I can think of to pass on a profitable trade is if we already have too much of our capital in play. I want the bottom 20% as well as the top 20%, otherwise I'm leaving money on the table.

 

[tech/a]

It's harder to do this with trading since there is far less confidence in the level of profitability of any individual trade. Anyway, the only reason I can think of to pass on a profitable trade is if we already have too much of our capital in play. I want the bottom 20% as well as the top 20%, otherwise I'm leaving money on the table.

Valid point and one which T/H is alluding to.

I'm sure everyone who analyses their income find that it doesnt come in a steady flow unless your a PAYE employee.
Those that trade fulltime will also notice the 80/20 rule at work.
Diversification is easiest when trading (compared to most businesses) hence working toward better returns for less effort and or expenditure would be more achievable by experienced fulltime traders than most business/owners.
One of the many benefits of a trading business.

Even those not trading fulltime should be aware of how to implement the 80/20 rule into their trading.

 

[barney]

It's only a fool's game for those that are fools. Opposite of the text book? Such as? I'm guessing you didn't mean that to be taken literally, otherwise I'd say that I don't want to be buying when the majority are selling.

Gidday J,

Just to clarify my last nights babbling ….
Re chasing big moves being a fools game “on most occasions” …. It was just an expression to amplify a point that TH had taught me a while back, but in the context of this thread, I stand by the statement ….

A newer punter trying to extract the 1000 pip move out of the Eur/Usd will most likely give up his open profits 99% of the time, simply due to the cyclic nature of the instrument .. unless he is running really wide stops, in which case he’ll probably blow the account eventually anyway!

Much better to try and take a couple of 20 pip swings out of the sub moves of the 150 pip daily range, bank the profits, and sleep well at night (ok early morning ! ) in my opinion, but everyone has a different agenda (and bank size) .......... occasionally the odd outlier profit will happen anyway, assuming more than one contract is being traded

With regard to doing the opposite of the text book ….. not sure if we are agreeing or disagreeing …. if you are reading text books which tell you to buy when everyone is selling, you are reading the right text books

Determining the extent of “everyone” is the difficult part … and that is true in all time frames from my humble experience ..........

Pretty sure we are actually thinking the same language, but when things get written down, distortion tends to set in and blur the edges …..

To keep the thread on track, my two indicators are:-

Sell pivot highs in a (longer time frame) downtrend
Buy pivot lows in a (longer time frame) uptrend

nothing magical about that, but it works a reasonable % of the time, with a couple of added filters

Cheers.

 

[nulla nulla]

I'm starting to think the two best indicators might be a dart board and tea leaves. There doesn't appear to be a lot of consistancy in the other indicators at the moment.

 

[satanoperca]

I like the KISS indicator as well.

But the best one I use for changing direction is the media.

When the media says that shares are running hot and the market is bullish, it is time to sell off longs and go short.

Also glance over MACD, Skols, RSI, ROC when looking at charts to see if any stands out. Can I rely on a indicator or all indicators, no.

It depends on market conditions and as mentioned before volume, time and price.

Love how threads quickly turn into ego trips of I'm right and your wrong.

Agrees with Nun, take charge of your own decisions and accept what they return.

Life is good, there is no black or white just shades of grey. Which shade are you?

Best trading to you all.

 

[weird]

Interesting ...

I have read Nassim Taleb's books, but also watched a Salem Abraham interview, which describes the same outliners, but with a different point of view and strategy.

I think I would like to have and think about both points of view, before deciding on one.

 

[nomore4s]

All off topic posts on Wysiwyg's theory have been moved to this thread

https://www.aussiestockforums.com/forums/showthread.php?p=529398#post529398

Let's try to get this thread back on topic now.

 

[Garpal Gumnut]

Yes sorry dyslexia

Welcome back.
You should write a book tech.
Muppets needs to be in the title.

gg

 

[KMW]

I'm another using the 10 EMA @ the 30 as well. Recomended on another site so I decided to try them. I'm a newb so still finding my way with TA. Have only just exited my first trade for a small profit, lesson was should have pulled the trigger for that exit a couple of days earlier when it signaled to get out.

 

[tunrida]

a ruler and a pencil - definately!

 

[Billyb]

I've been learning about indicators lately and have come to the following conclusions

Here's my views, which I write to collect my thoughts but also in the hope that someone else might find them food for thought... feel free to comment or shoot me down :

-They are a fancy way of expressing historical data. But you can see this data in it's raw, unmanipulated form anyway - it's called volume and price!
-If one uses and indicator, they are using it because they think it will increase their win %. But we know that win % has very little to do with profits, your overall trading system is far more important in determining this. So why put so much emphasis on indicators?
-Indicators obviously have their place, many people fit it into their trading systems and are profitable, but I think they have the potential to distract beginners from what's really important - price action and your trading system.
-Indicators get complicated because you need to adjust them and change them for different market conditions -trending, whipsawing etc. That's adding way too many variables to any system, and it's bloody hard. My life is stressful enough as it is, so I've decided to stop spending more time on learning indicators and get back to developing myself in the meatier stuff. If only there was more time

 

[addison]

firstly, there should be some room for both tech and fundamental analysis in a traders trading philosophy, i guess above all it should be understood that trading is an intellectual game and stock picking or trading on tips is really gambling, second i think anyones trading system, culture, philosophy or style should be free to evolve, and fluctuate, as ones life, ones objectives, and the market circumstances change, presently im using a barchart, with a 9 or 5 ema, because its tight, and i want an indicator to react as fast as possible, im using this same setup over any timeframe too, and for signals am combining it with a simple idea of a couple of consecutive closes above or below the ema, checking also for higher highs and higher lows, but before im looking at this im drawing trendlines and support/resistance lines to identify trends, doing this from far out (1y, 2y, 5y chart) helps me to see if and when, and where, a trend change occurs which gives me an overall clue as to how i "think" the price will move, and thus how i should trade, price breaching trend lines is a sign either that im right (on a good thing), or that ive been wrong, and should close my trade to limit my losses, protecting capital is always very important, i like to think of trendlines as having the ability to "fence in" the price, and be better able to react, also i use a simple position size calculator to work out how many shares etc to purchase for each trade, so as to keep any loss (and we should assume weve made a mistake, until the price shows us otherwise) to a manageable minimum, hope this is useful

 

[Wysiwyg]

-They are a fancy way of expressing historical data. But you can see this data in it's raw, unmanipulated form anyway - it's called volume and price!
-If one uses and indicator, they are using it because they think it will increase their win %.

Then volume and price have also indicated something, otherwise the entry is random.

 

[skc]

-If one uses and indicator, they are using it because they think it will increase their win %. But we know that win % has very little to do with profits, your overall trading system is far more important in determining this. So why put so much emphasis on indicators?

Are you kidding? Look at your profit equation and tell me win% has very little to do with profits? It is directly related to profit. As is avg win and avg loss. They are all as important as each other.

 

[Billyb]

Are you kidding? Look at your profit equation and tell me win% has very little to do with profits? It is directly related to profit. As is avg win and avg loss. They are all as important as each other.

I think you know what I mean. From my understanding, what is important is expectancy (which includes win %), yes I shouldn't say it has very little to do with profits, that was an overstatement - but my point remains that you can be inaccurate, and only win one-third of the time, and still be profitable. The point I was making is that searching for high win % (i.e looking for the right indicator to improve your win %) will not necessarily improve expectancy, and thus profitability. Thanks for pointing out my poor use of words which could be misleading, I would edit it but it wont let me.

 

[tech/a]

Billy
A combination of the two is the very best scenario.
High% win rate and high R/R
But your right you can be right far less than 51% of the time and be spectacularly profitable

 

[skc]

I think you know what I mean. From my understanding, what is important is expectancy (which includes win %), yes I shouldn't say it has very little to do with profits, that was an overstatement - but my point remains that you can be inaccurate, and only win one-third of the time, and still be profitable. The point I was making is that searching for high win % (i.e looking for the right indicator to improve your win %) will not necessarily improve expectancy, and thus profitability. Thanks for pointing out my poor use of words which could be misleading, I would edit it but it wont let me.

Thanks for clarifying for everyone.

I have seen people extrapolate "Win % isn't everything" to "Win % is not important"... so just wanted to make sure no one was going to be mis-led by your earlier wording.

For some systems it might be easier to work to improve win%, for others it might be avg win ratio that is easier to manipulate. They are the two main parameters to your profit so I wouldn't neglect either one of those.

 

[tech/a]

If I had to pick 2

It would be

GAPS
VOLUME.

Both show effort better than any other indicators in my view.