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How to properly use Technical Analysis 137 replies

What indicators do Hedge Funds use or do they even use one? 12 replies

Do you backtest your systems PROPERLY? 0 replies

Custom Indicator not Drawing Properly? 0 replies

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How to properly use indicators

Quoting AntiCre
{quote} I've described my inital thoughts here ....
I'd be using something else rather than unsmoothed stoch (X,1,1) though - 2noisy4me. Lag is not that big of an issue here, it is probably a good idea to establish that the high is lower than previous high (and one can beef up the R:R by pyramiding anyway so it's not important to enter extremely precisely). Also I'd personally switch to a higher tf for this, there is simply less noise/less problems with news etc.

k
Quoting kprsa
P.S. If, in addition to this, one had a systematic way of adding to positive trades i.e. making a bigger bet when one is right than when one is wrong (see examples here or here, or just in my previous example adding to trade above every time there's a lower high+indicator cross and shifting the s/l so that risk reduces), I'd think it would be very difficult to lose. All the best, k
Thanks for pointing to the thread/post. Will definitively read it!
CrucialPoint: "I'm alpha". AntiCre: "I'm your Omega - the end."
Quoting AntiCre
{quote} Thanks for pointing to the thread/post. Will definitively read it!
The key point there is adding to the bet when right but reducing risk. That way you can keep any losses small, but have essentially no limit in how much you can gain.

I guess it's good to put the initial risk/bet small (just so that one doesn't get nervous about losses that inevitably happen), and do one's best to avoid any gaps etc, that could cause catastrophic losses - so no heavily manipulated currencies, trading at higher tf to avoid news, not using dodgy brokers, paying attention when there are big events that can cause jumps/gaps etc.

Cheers,
k
Quoting AntiCre
{quote} Often when I enter on retracements they turn out as reversals.
Can you share some recent examples?
Quote
The question is, how to spot/quantify/identify the potential of a retracement going back to trend direction or reversing.
If you have this handy, how it will turn you into a better trader? Asking just to see what is your plan? Imagine you have it? What's next? What's your plan, if entry goes wrong? Constructive questions. Maybe can help, not sure...
Jonny Hatinga. IQ 69.
Quoting MoneyZilla
Can you share some recent examples?
I stopped trading with common indicator on common TFs a few months ago since I first will fully understand how a better system may be constructed.

Quoting MoneyZilla
If you have this handy, how it will turn you into a better trader? Asking just to see what is your plan? Imagine you have it? What's next? What's your plan, if entry goes wrong? Constructive questions. Maybe can help, not sure...
I would filter out probably bad signals*. However, that all depends on the quality of this tool. What I've done so far is using a tight SL and adjusting the TP if prize went in my direction. Thus, I guess I'd accept the loss. However, depending on your explanations on switching it would be maybe a better idea to add an opposite trade in order to stop losses. (But I haven't fully thought about it).

---

*I still think about it in a similar way then CP probably does it. If we have a tool to measure the strength and direction of wind, we can sail with prize if that wind is strong enough. If not, it would be good to don't enter (although a usual indicator would indicate to do it).
CrucialPoint: "I'm alpha". AntiCre: "I'm your Omega - the end."
Quoting AntiCre
{quote}If we have a tool to measure the strength and direction of wind, we can sail with prize if that wind is strong enough. If not, it would be good to don't enter (although a usual indicator would indicate to do it).
I'd say you don't need sophisticated tools for this.

Example:
Direction of the wind: lower lows/lower highs -> down. higher highs, higher lows -> up.
Strength of the wind: ratio of size of pullback (in pips) to size of swing (in pips). Check the bigger picture before taking the initial trade: If previous higher timeframe pullback-to-swing ratio bigger than 50%, you probably don't wanna take the trade. Otherwise, get in. If on your timeframe (or on higher tf) the ratio is getting smaller over subsequent swings, hold your trade longer, etc.

Cheers,
k
A year ago I startet looking at the difference of down/up path where the up path is high-low for up candles and down path are the sum of wicks for up bars and vice versa for down bars. I ended up with a nice oscillator, however then again the question arose how to use the info with contradicting info for smaller lookback periods.
CrucialPoint: "I'm alpha". AntiCre: "I'm your Omega - the end."
On Gold, during the last 3 weeks or so, most levels were visited over 25 to 30 times, some of them.

I have no idea how one can make money using SLs. Truly amazed how traders hope to stay profitable, when this is almost impossible. Can you digest that? 25-30 visits. The visits are probably even more. Just lazy to count them.

Last week Wed-Fri, just one of the levels got over 16 visits, when certain criteria was applied. 30+ visits, easy. And traders do hope a SL is going to help them?!? To make money?!?

My low IQ of 75 has problems understanding their flawless logic. Therefore, I do accept, I have to be the only fool around...

EDIT: I on the other hand, took like 18-19 flips. Got -$173 of DD. Now almost recovered at +$100 or over. This is demo. It is an indicator. Sends signals for buy and sell. Tries to recover the lost profit.
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Jonny Hatinga. IQ 69.
You are using 50 to 100 years old indicators and you expect them to work in high frequency trading markets?
Have you lost your mind?
Now attach it to your linear data and wonder how to properly use it

TRD
Quoting VEEFX
Now, use a MA from that fixed/constant start date/time/candle... MA(10) on the close of 11th candle, MA(11) on the close of 12th candle, MA(12) on the close of 13th candle etc on the chosen timeframe.
Voila! However, I don't see why that should be superior to using common MAs. MAs just give the average prize over a given period. Why should be the average of the last, the two last, three last, etc. candles be more informative than a constant average over the last 60 candles?
CrucialPoint: "I'm alpha". AntiCre: "I'm your Omega - the end."
The question still remains if it is enough to use 1 reference point. You need at least prize as a second reference point. Here you have your moving reference point . Is the reference line along an edge? I mean, do we really have a higher chance of winning if we only buy if prize is above that reference line. Or would you use it in order to gauge momentum (however it may be done)?
CrucialPoint: "I'm alpha". AntiCre: "I'm your Omega - the end."
  • Post #112
  • Quote
  • Edited Nov 15, 2017 12:15am Nov 14, 2017 11:51pm | Edited Nov 15, 2017 12:15am
Quoting AntiCre
{quote} Ok, here you go (although I've already repeatedly mentioned it. While studying the charts with CPs influx indicator where he marked entries/exits, I made the this observations: Whenever the longer-term momentum breaks out together with the short-term momentum and both momenta are above its average, then there seems to be a good chance to obtain some further prize movements in this direction. If the short-term momentum retraces while the long-term momentum is still outside the "ranging" boundaries, there is a good chance to see a continuation...
Nice thread AntiCre ! Do you mean the dot line is the average of the solid line ? In this case, there are 2 solid lines using different period (back bars), and 2 dot lines, and each of them is the average of its own solid line. For averaging, which method will we use ? SMA, EMA, SMMA, LWMA or may be non lag MA ?
Gracias !
I am failed,but i found 1,000 ways that won't work ...
Quoting kprsa
Interesting thread. I would make one (sorry if it is too obvious!) point about the price chart itself. For visibility of this, it is good to use the line chart with added SMA(period=1, price=high), and SMA(period=1, price=low). Your moving averages then just mark High and Low of any particular candle. 1. Price moves in a uptrend typically such that its Close is near the High. 2. Price moves in a downtrend typically such that its Close is near the Low....
Good idea kprsa ... one thing i am still not clear here, i have read a post at penguintraders.com : most of the time price will be inside the channel (BB and/or Donchian)... I have no statistic data on this, but i read some where at Sim thread, around 95% price will be inside BB. So, the idea is to trade counter trend, in the meaning that if price goes out of upper channel, we will sell ... predicting that price will come back down to the channel ...
From point (1) above, does it mean that we will prepare a buy order, because close price is near the high (trending is up at the moment) ?

Quoting kprsa
{quote} Donchian channel for example inherits this property of the price movement, notice the "spread widening" and "slingshots" at the end of every directional price move. Cheers, k {image}
Is it better to use the default Donchian indicator, or the modified one (without fractals) for this purpose ??

Muchas Gracias
I am failed,but i found 1,000 ways that won't work ...
Quoting despacito7
{quote} Nice thread AntiCre ! Do you mean the dot line is the average of the solid line ? In this case, there are 2 solid lines using different period (back bars), and 2 dot lines, and each of them is the average of its own solid line. For averaging, which method will we use ? SMA, EMA, SMMA, LWMA or may be non lag MA ? Gracias !
It was just my understanding of what CP may do with his indicator. The two solid lines have different lookback periods. And for each of both lines I've calculated imho the SMA(15) of the solid lines (dashed lines).
CrucialPoint: "I'm alpha". AntiCre: "I'm your Omega - the end."
Quoting kprsa
For visibility of this, it is good to use the line chart with added SMA(period=1, price=high), and SMA(period=1, price=low). Your moving averages then just mark High and Low of any particular candle.
I always amuse myself big time when I see some priceless information posted here and nobody notices it, including the German scientists!

Thanks to Mr. Despacito7 I saw your post KPRSA. Unbelievable!

I can tell you why they will always miss it, cause they expect to buy when there is a quadruple confirmation from the four most trusted indicators, totally excluding the price itself and this is all in alignment with the Moon, Mars and Saturn being in one line, 12 days after the first Sun storm... and there should be no clouds!
Jonny Hatinga. IQ 69.
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Quoting despacito7
{quote} most of the time price will be inside the channel (BB and/or Donchian)...
That is totally correct. Dunno how Doncian channel or BB work, but there is a simple channel Mr. KPRSA had already shown and if you examine it?!?

Quote
i read some where at Sim thread, around 95% price will be inside BB.
Yep.

Quote
So, the idea is to trade counter trend
Stupid idea. Will all end up in tears. You have to modify it. The start was great, but this? Hmmmm. You can do better I am sure! Play around with the options. Take a close look at the OCHL prices within the channel? Counter trend trading is cool when it was just a try and then corrected. You will never ever make money in a long run trading against the trend. Period.

I just told you what to do, btw. Stupid me...

Quote
From point (1) above, does it mean that we will prepare a buy order, because close price is near the high (trending is up at the moment) ?
Yes. It never hurts to go with the flow. Where your trend trade is placed is not really so important. But if you want to get the best seats, take a look in the channel where you can place your buy trades?
Jonny Hatinga. IQ 69.
Quoting VEEFX
{quote} Like this?.. but I just took a countertrend trade. How? H1>M30>...>M1 gave Countertrend signal and D1>H4 gave trend following. no channels, no bands, no stocks, no indicator, just PA connecting 'dots' on candle close :-
You show no channel example, but taking a counter trend trade in a channel has to be followed by taking a trend trade in the same channel. Your example is for taking a trend trade...

If I draw my mental channel on your example - yes. Exactly like this a trade within a channel has to be taken. But this was not what Mr.Despacito7 had in mind. He plans to open the sells in the uphill movement... while there are like 7-10 buying opportunities in that movement. Not all can be taken, of course. Not possible. But few of them, using the channel, are possible to find...
Jonny Hatinga. IQ 69.
Quoting despacito7
{quote} Good idea kprsa ... one thing i am still not clear here, i have read a post at penguintraders.com : most of the time price will be inside the channel (BB and/or Donchian)... I have no statistic data on this, but i read some where at Sim thread, around 95% price will be inside BB. So, the idea is to trade counter trend, in the meaning that if price goes out of upper channel, we will sell ... predicting that price will come back down to the channel ... From point (1) above, does it mean that we will prepare a buy order, because close price...
I have used this idea to enter and remain in trades as long as there is no chance for reversal. In other words, the price slingshot would appear (ideally along dominant higher tf trend) and price would go in the expected direction. Then one enters (in one mini pullback inside a candle) and stays in trade as long as the opposite price slingshot appears.
One needs to be careful about automatic entry as soon as one necessary condition for the reversal happens (price outside B.B.). The same thing usually happens also when price genuinely wants to go in one direction.
Cheers,
k
Quoting MoneyZilla
{quote} I always amuse myself big time when I see some priceless information posted here and nobody notices it, including the German scientists! Thanks to Mr. Despacito7 I saw your post KPRSA. Unbelievable! I can tell you why they will always miss it, cause they expect to buy when there is a quadruple confirmation from the four most trusted indicators

Different people just “see” different things. I guess when we are faced with something big and silent - the market, people need a metaphor of some sort to be able to deal with it. The classic one is bulls vs. bears. One person’s metaphor of the market may not correspond to somebody else’s. (Even the pros often argue here in the forums about differing pictures of the market - to each person it is so obviously that one thing and the other guy is an idiot). So I try to share a few things that resonated with me, so whoever picks it up is fine.
Cheers,
k
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