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Your opinion needed - regarding my choice of indicators
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musshan

Member Since Sep 16, 2009  10 posts Shankar Narayanan GR (musshan) Sep 25 2009 at 13:08
Hello all,

I am considering trading on daily charts. For this purpose i am planning to use Stochastics Oscillator(default settings) for entry signals and ADX(default settings) for trend confirmation. Is it correct to use these indicator for the above purpose? If not can you suggest any alternative?

Your inputs much appreciated
Thanking you

fxanalytics

Member Since Sep 23, 2009  17 posts fxanalytics Sep 25 2009 at 17:28 (edited Sep 25 2009 at 17:29 )
Shankar,

No one can really answer that question for you. There are so many variables here we would have to write a book. First and foremost is the volatility you will encounter taking signals from a daily data-point. It means you will typically be in a trade for weeks while things develop. This can lead to very deep draw-downs. Proper account funding use of leverage are paramount here.

Your best bet here is to sit down and learn first and foremost how to properly test a system, then apply your questions to the test method and see what returns are generated. You will need significant data to back test and you need to know how to extract the right information from that. Read Evidence Based Technical Analysis as a start for your testing and expand from there.

In your style of trading Data Mining and Parameter Optimization, from a statistically significant data sample, are your friends.

Remember; Good Trading, like Brain Surgery, is the result of hard work, diligent research and study. You don't start there, that's where you end up.


Forexanadova

Member Since Oct 24, 2009  186 posts Forex Anadova (Forexanadova) Oct 24 2009 at 23:56
You can use any indicator as long as you know what those mean, how they work etc, now, you are mentioning a daily chart,if you have a lot of money in your account, good, otherwise, use the daily to ID the trend and use 1Hr for placing trades.

Good trading

Naws

Member Since Oct 22, 2009  3 posts Naws Oct 29 2009 at 04:37
Go with no indicators

Learn real price action trading

streepips

Member Since Nov 20, 2009  20 posts Street Pips (streepips) Nov 20 2009 at 22:30
I use the stocastic-slow but the setting is not on default it is on 36 days, the reason being, the forex market is 6days a week multiplied by 6 = 36days that is a square root number which works good in forex per W.D. Gann, he was a wiz when it came to #'s and 36 days is a month and a week so its a good indicator for me, because it shows when the trends are begining and ending levels above 80 are over bought and levels below 20 are over sold, I hope this helps, I'm a price action trader also but I trade on the 5 minute chart. 25minutes in and out, 5 candles, target hit! but sometimes hr and 4hr charts to get major swings, my indicators are ichimoku, 20 moving avg and stocastic 36days, along with Gann lines as support and resistance, heres a live trade from last week on 11/09-11/10/2009 that took 15hr on hr chart +99pip.......gann lines are green, blue lines are open and close of the trade red lines are resistance and support.......the cloud, red,blue, and white lines are the ichimoku, and the green line is a 20day moving average I put up two charts so it won't look confusing but just look @ the stocastic telling you the swing is about to happen, and if you notice price crossed below the 20MA, when price crosses 20ma tenkan/kijun all at once generally you'll have a swing, thats 1 price action methodlol


<a href= target='_blank'><img src= /></a><a href= target='_blank'><img src= /></a>
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Early Birds get the worms!!!
macdoug

Member Since Sep 20, 2009  21 posts macdoug Nov 20 2009 at 22:51
your indicators are good for the purpose you describe and providing you are using the stochs to trigger entries after pullbacks in a trend you should be ok. I would use 5.3.3 setting for a quick response from the stochs. I would suggest including price action and technical analysis to find trends and entry levels. Eventually, with practice and experience, you will out perform the indicators by a wide margin

mettall

Member Since Nov 09, 2009  27 posts mettall Nov 26 2009 at 16:53
<red_blinking_text>
YOU DON'T NEED INDICATORS!
</red_blinking_text>

The only thing you need is a SMA - but its not much useful.

Indicators suck!
The market moves UP and DOWN. This movements (up and down) are based on opened trades and the trades that are executing right now.All technical indicators takes these movements and draws something on your screen. But these movements are different in days, weeks, months and years. So for example, if you see today something with your indicators and you see the same before 2 days - these thing are based on different data and this information is useless for you.

All EAs and strategies, based on technical indicators, ARE DOOMED!
if you see working EAs here - they are on demo accounts... its different when you play on live account.

Memento mori!
bizWiz

Member Since Aug 06, 2009  397 posts bizWiz Nov 26 2009 at 17:17 (edited Nov 26 2009 at 17:17 )
mettall posted:
    <red_blinking_text>
YOU DON'T NEED INDICATORS!
</red_blinking_text>

The only thing you need is a SMA - but its not much useful.

Indicators suck!
The market moves UP and DOWN. This movements (up and down) are based on opened trades and the trades that are executing right now.All technical indicators takes these movements and draws something on your screen. But these movements are different in days, weeks, months and years. So for example, if you see today something with your indicators and you see the same before 2 days - these thing are based on different data and this information is useless for you.

All EAs and strategies, based on technical indicators, ARE DOOMED!
if you see working EAs here - they are on demo accounts... its different when you play on live account.


i agree with you metall, i believe that most of the successful traders do not use indicators at all.

Street Pipz, i've just noticed your chart, and quite frankly i would like to know how are you handling so many indicators and so many different colors surprise? i've stared at it for 10 seconds and already felt a migraine starting to work its waygrin.

Sleep is for the weak.
streepips

Member Since Nov 20, 2009  20 posts Street Pips (streepips) Nov 28 2009 at 09:32
It's very simple, each color represents something different (there are only three up on the chart), you are both totally right you don't need any indicators, BUT the traders that are on Paternoster Square, and 2-1 Nihombashi, probaly have indicators, or they would lose they're jobs, and every propfessional trader that I know (as in I can go to their houses, not heard of), uses indicators also, when I mean pro, I mean people that their only source of income is trading........................so we kinda want to mirror those guy that use $1000.00 pips right? besides I get my info from the streetz!!! but the most important thing in trading are not even on the charts, it's called money management/risk management, if you can't master those two tactics and have them written down and follow them in every trade you will always fail in the long run, and that is something that I have not seen alot on this site.......managing your denero is the most important substance in trading, thats why you have people that have alot of drawdowns.....Shankar make sure everytime you click, you have a stop/loss and take profit in place always, think about it, some people think if you have a s/l and t/p in place on your orders that the trade may go against them to fast or that they dont want to loss that trade....then maby you shouldn't place that one, you should only press that mouse if you are confident that you won't loss and if you do, that you already know where and how much you are going to loss, does anyone have a trading plan in place written down?

Early Birds get the worms!!!
streepips

Member Since Nov 20, 2009  20 posts Street Pips (streepips) Nov 28 2009 at 10:23

I just looked at your RSI breakout post and I thought you don't use any indicators? when u said that in reply to my post, I thought u meant, you use a price line, no candlesticks, no indicators, no trend lines, nothing on your chart but just raw intellect, using price action? so you don't use fibonacci tools neither huh? biz0101 posted:
    mettall posted:
    <red_blinking_text>
YOU DON'T NEED INDICATORS!
</red_blinking_text>

The only thing you need is a SMA - but its not much useful.

Indicators suck!
The market moves UP and DOWN. This movements (up and down) are based on opened trades and the trades that are executing right now.All technical indicators takes these movements and draws something on your screen. But these movements are different in days, weeks, months and years. So for example, if you see today something with your indicators and you see the same before 2 days - these thing are based on different data and this information is useless for you.

All EAs and strategies, based on technical indicators, ARE DOOMED!
if you see working EAs here - they are on demo accounts... its different when you play on live account.


i agree with you metall, i believe that most of the successful traders do not use indicators at all.

Street Pipz, i've just noticed your chart, and quite frankly i would like to know how are you handling so many indicators and so many different colors surprise? i've stared at it for 10 seconds and already felt a migraine starting to work its waygrin.

Early Birds get the worms!!!
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