Why technical indicators dosent work ?

[rsv.suresh]

why technical indicators dosent work?

Hello traders my name is suresh new to traderji. I just wanna share a quick thought about technical indicators and why they dosent work all the time........so hear is my understanding with an example :!:---

Immagine that a large crowd of traders buying and selling at the same time, so in that crowd the largest group of traders having the same ideas at that moment will be in control of the direction of the market,remember that it's not actually the group of traders but the largest amount of money used as a collective force to direct the market.So the point is the largest amount of money may not be using the indicator that you are using. Does it makes sence? or would it make sence to use a indicator that you were the only one following? clearly the answer is NO

So that being said if more than 50% of the market participants are waiting on a indicator to give them buy or sell signal, that indicator is more likely to work. Remember no indicator works 100% of the time..

Now the question is which indicator works most of the time?
the answer is simple and all of you even knew it....It's nothing but support, resistance and trend.


:thanx:

 

[supremo]

there are so many indicators for different kind of traders and different kind of trading techniques and plans.
One can say that this is good for him but for others is not. one can even say that this indicators works for him but for other is not.
My point is... indicators is just an indicator, but one should trade the plan and not the indicator.

 

[rsv.suresh]

Hi suprimo thank you for your reply. I agree with some of your explanation but not all of it. U said some indicators work for only some of them that's true but
the point I'm trying to make is the indicator that is used by a maximum number of people at a particular time is more likely to work. So if that large group of people are waiting on a MA crossover and a little chunk of people are waiting for support or resistance zone at that time the first group wins and finally last but not the least support and resistance are the levels that every one is more likely to watch other than a fancy indicator which only some of them have on their charts..... and yes sticking to ones plan always helps and it is the most important part in ones trading course



happy trading

 

[prasham]

According to my knowledge in TA, you can call me Novice but from what I've understood till now, Most accomplished traders use multiple indicators to confirm the trend. Hence maybe a few indicators might not be showing the right directions but if you used a combination of indicators Say RSI, Aroon, Bollinger etc you can judge the market just a bit better.

 

[rsv.suresh]

hi prasham good to see u on board. Now talking about technical indicators, 99% of them are lagging and also you said that we can get a conformation of the trend right? my question is why do you need a conformation if you know that it's a trend ( higher highs, lower lows or lower highs lower lows). According to me price is the conformation. If I see price starting to move in my direction after the security I wish to trade meets the basic rules of my system I will trade it naked with no indicators on the chart except s&r and trend lines....



happy trading

 

[sudoku1]

Remember no indicator works 100% of the time..

even if they work 70% ....its fine ..isnt it ?

 

[prasham]

hi prasham good to see u on board. Now talking about technical indicators, 99% of them are lagging and also you said that we can get a conformation of the trend right? my question is why do you need a conformation if you know that it's a trend ( higher highs, lower lows or lower highs lower lows). According to me price is the conformation. If I see price starting to move in my direction after the security I wish to trade meets the basic rules of my system I will trade it naked with no indicators on the chart except s&r and trend lines....



happy trading

I know of many traders who don't use any indicators except price. But then they are god-gifted :clap: unlike most of us who have to toil hard to find good entry and exit points. Indicators provide better entry and exit points on consistent basis which is most important.

 

[mohan.sic]

Well said by Suresh.:thumb:

 

[Capricorn]

I know of many traders who don't use any indicators except price. But then they are god-gifted :clap: unlike most of us who have to toil hard to find good entry and exit points. Indicators provide better entry and exit points on consistent basis which is most important.

God has nothing to do with it mate. Its sheer handwork and out of the box thinking. That.s the case in any field not just trading.

 

[linkon7]

If i was to play a game of coin toss, the probability is always 50%. If i toss it 10,000 times and plot the movement, I'll get a nice chart with support and resistance and plenty of indicators telling me the trend and information on the relative strength of the game in progress. The Fact remains, probability still remains a 50%. History does not guarantee the future.

Just because we have a green day today doesnt guarantee a green day the day after. Price movement remains random in nature. Its all about supply and demand and price's inherent tendency to revert back to true value and then go through a phase of excess in either directions.

But, we as traders assume that history repeats itself. Accumulation will be followed by mark up and we go long assuming price has found a floor and probability of the trade is north. That mark up will be followed by a phase of excess and we use indicators to tell us where momentum has reduced so that we get a graceful exit.

That's all indicators are good for. A good exit and sometimes a good entry.