Hi,
I'm opening this thread to start a discussion about what tools or indicators can be used to confirm a signal provided by a trading system. This trading system might be a very basic moving average crossing alerter or a more complex system using any kind of indicator.
To give a simple example, let's consider the basic moving average crossing system. We all know that such a system will provide a lot of false signals. Then we can try to improve that system by using moving averages with less lag and less false signals, but still the false signals are part of our trading.
Of course we cannot remove all false signals! Or trading would be so easy ;-)
Well, I would like you to share with other people in this thread your idea about signal confirmation.
There are a lot of trading tools that we can apply when trading:
- volume analysis
- Fibonacci
- chart patterns
- candlesticks
- divergence on oscillator indicators
- market profile
And I'm sure I've forgotten many tools.
Just to give some idea, we could use volume spread analysis to confirm a cross signal from our moving average crossing system. If we see a signal to enter long, can we see in the background some special volume bars indicating that the trend is likely to reverse?
So I hope we will share a lot of ideas in this thread and that we'll all have many things to learn.
Daniel
I'm opening this thread to start a discussion about what tools or indicators can be used to confirm a signal provided by a trading system. This trading system might be a very basic moving average crossing alerter or a more complex system using any kind of indicator.
To give a simple example, let's consider the basic moving average crossing system. We all know that such a system will provide a lot of false signals. Then we can try to improve that system by using moving averages with less lag and less false signals, but still the false signals are part of our trading.
Of course we cannot remove all false signals! Or trading would be so easy ;-)
Well, I would like you to share with other people in this thread your idea about signal confirmation.
There are a lot of trading tools that we can apply when trading:
- volume analysis
- Fibonacci
- chart patterns
- candlesticks
- divergence on oscillator indicators
- market profile
And I'm sure I've forgotten many tools.
Just to give some idea, we could use volume spread analysis to confirm a cross signal from our moving average crossing system. If we see a signal to enter long, can we see in the background some special volume bars indicating that the trend is likely to reverse?
So I hope we will share a lot of ideas in this thread and that we'll all have many things to learn.
Daniel