Trend Lines or Indicators?

beginner_av · #21 6th February 2007, 04:13 PM

one more thing...as someone pointed out that a lot of indicator bashing is going around, indicators take out the subjevtivity from the system...not my words...Tom DeMark's.

bvpraveen · #22 9th February 2007, 01:26 PM

Isn't price is also an indicator.

Praveen.

beginner_av · #23 10th February 2007, 04:47 PM

when we say indicators, we use it as maths based indicator that are derived from price, volume, time or sentiment. yes price action is the biggest indication...and it is always better to use indicator to confirm the price pattern, not the other way round (alan farley's word).
and a very good lesson that i learnt is that you have to know how the indicator is constructed...that will solve half your problems...like in some ADX thread or MACD thread i saw lost of posts as to how to adjust it to build a trading system. well u know according to me U JUST CANT do that so mechanically (would love to read someone's commemt on this who has read ADXcellence by Schaap)...because ADX wa not built that way..during consolidation phase,ADX flattens...will u exit immediately? But in many sharp falls, ADX continues to rise for the first two or three days.

MACD was not designed to trade with cross of 0 from bottom or above...it is just the difference of two moving averages, smoothed..hence it just shows the STRENGTH of the TREND and thats it...when MACD changes direction, beware..trend continuation may be suspect..will u square off immediately and go short? Of course not.
As Martin Pring says it - u carry an umbrella as soon as u see clouds...but do u open it before it rains (or something like this).

In my last few days, with CV's help i have learnt to look at TA and trading with new eyes...and believe me it is fascinating.

hope that helps in the discusion.

bvpraveen · #24 10th February 2007, 05:26 PM

Quote:

Originally Posted by beginner_av

when we say indicators, we use it as maths based indicator that are derived from price, volume, time or sentiment. yes price action is the biggest indication...and it is always better to use indicator to confirm the price pattern, not the other way round (alan farley's word).
and a very good lesson that i learnt is that you have to know how the indicator is constructed...that will solve half your problems...like in some ADX thread or MACD thread i saw lost of posts as to how to adjust it to build a trading system. well u know according to me U JUST CANT do that so mechanically (would love to read someone's commemt on this who has read ADXcellence by Schaap)...because ADX wa not built that way..during consolidation phase,ADX flattens...will u exit immediately? But in many sharp falls, ADX continues to rise for the first two or three days.

MACD was not designed to trade with cross of 0 from bottom or above...it is just the difference of two moving averages, smoothed..hence it just shows the STRENGTH of the TREND and thats it...when MACD changes direction, beware..trend continuation may be suspect..will u square off immediately and go short? Of course not.
As Martin Pring says it - u carry an umbrella as soon as u see clouds...but do u open it before it rains (or something like this).

In my last few days, with CV's help i have learnt to look at TA and trading with new eyes...and believe me it is fascinating.

hope that helps in the discusion.

Ok...

Thanks for your information.

Praveen.

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