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Why do traders use so many indicators?

  • #41
  • Edited 4:53pm Feb 12, 2020 4:35pm | Edited 4:53pm
Hey mate! If an indicator gives you an edge in the market, that will be an interesting thing to hear. I humbly differ. But as to using indicators in a more effective and efficient manner see my second post, post #35 above.

Trade safe.

KP

Quoting JetTrader
{quote} The term "Indicator" has to be defined clearly before this statement can be evaluated as either being true or false. Not all Indicators are created equal and not all Indicator Integration work has the same goal or net effect. Some Indicators are not capable of 'seeing' what other Indicators are designed naturally to detect. So, if an Indicator sees something that another does not see and that Indicator is Integrated with additional Indicators that also see things other Indicators don't see, that's called an Edge. The Edge, is what keeps...
Do your homework, follow the footprints of smart money
  • #42
  • Feb 12, 2020 5:05pm Feb 12, 2020 5:05pm
Quoting restless
I think people tend to believe that proper set of indicators or more indicators will give them advantage of knowing more market elements - i.e. indicators for main trend, indicators for entries, indicators for support and resistance, indicators for sl and tp etc.
In an aircraft, the Airspeed 'Indicator' (its literal name) provides you with information about your speed through the air. The Altimeter provides you with information about the aircraft's altitude above the ground. The Attitude 'Indicator' (its literal name) provides you with information about the physical orientation of the aircraft (nose, wings and tail) with respect to the horizon. The Turn Coordinator provides you with information about the aircraft's rate of turn and the aerodynamic 'balance' of that turn. The Directional Gyro or Heading 'Indicator' (its literal name) provides you with information about the magnetic heading of the aircraft. And, the Vertical Velocity 'Indicator' (its literal name) - also called the Vertical Speed 'Indicator' - shows the rate of climb or rate of descent of the aircraft.

These "Indicators" are known as the Six Pack. No, not beer, but "Instruments" that "Indicate" individual conditions or states of the aircraft in real-time. Before the advent of Glass Cockpits, we used to use these "Instruments" (Indicators) to safely fly an aircraft from point "A" to point "B" without incident. Toss in a simple VOR instrument and you can literally Navigate your way around the planet.

Now, here is a picture of that same six pack:

Attached Image (click to enlarge)
Click to Enlarge Name: Standard Six Pack.png Size: 494 KB



We've come a long way in Aviation. And, because of that evolution of our thought process we have designed things called Integrated Avionics. The Six Pack above is not Integrated. However, this is:

Attached Image (click to enlarge)
Click to Enlarge Name: Integrated Avionics.png Size: 1.2 MB


Exactly same information provided as the basic Six Pack (and then some no doubt), but in an Integrated format. The Six Pack can be thought of as that which is Analog Technology. The Honeywell Primus Apex can be thought of as that which is Integrated Digital Technology. At the core, they both do the exact same thing - at the most basic of levels. The Apex System still contains all of the exact same information they Analogy Six Pack provides. However, after the Six Pack, that's where the similarities come to and abrupt end. The Apex System is classified as a fully Integrated Avionics Suite.

You fly the Six Pack provides you with enough information to operate under VFR weather conditions (flight by visual rules). The Apex provides you with enough information to operate under VFR and IFR rules (Instrument Flight Rules). The analog Six Pack can also be flown under IFR conditions, but it needs help. It needs additional Instruments such as a VOR, a Transponder and some Communications equipment - else the FAA Regulations say you cannot operate under IFR conditions.

Naked Chart Trading is like flying under VFR conditions. The Line Chart itself provides you with basic "Six Pack" type of information about the Market. However, Systems Trading is like flying in IFR, MVFR and LIFR conditions both Day and Night - as long as you posses an Instrument Rating and remain current. The Trading System allows you to get it done even when "conditions" don't appear to be optimal on the surface of the Market. It gives you the ability to Navigate what at first appears to be un-navigable conditions.
  • #43
  • Feb 12, 2020 5:18pm Feb 12, 2020 5:18pm
Quoting cuchuflito
Following on the ladder of the Big Boys. The market, if you pay attention, swings between stop-loss orders, liquidity pools, on each and every time frame.
As far as I know, there is no true depth of market on Metatrader and for a couple of different reasons. Namely, each broker has their own source(s) of liquidity and their pricing engine will always reflect that from broker to broker. However, you are right about stop orders being visible. All the bucket shops know where your stops are placed within their platform.


Quoting cuchuflito
That is where the big boys see the orders accumulated sitting. And that is why some stop run traders are successful, they learn how to spot those levels, and have systems to monitor the reaction to those stop runs, AFTER the run. The lower the TF, the more difficult to get trapped in a fake move.Which is also difficult for some Big Boys, competing with other Big Boys. Business as usual, day in day out.
Sounds like an interesting System, especially the post stop run monitoring part. Like I've said before, there are a myriad of different ways to skin the cat and it all depends on what kind of Research has been done to locate patterns that repeat - like the pattern of detecting a stop run.
  • #44
  • Feb 12, 2020 5:36pm Feb 12, 2020 5:36pm
Quoting JetTrader
{quote} In an aircraft, the Airspeed 'Indicator' (its literal name) provides you with information about your speed through the air. The Altimeter provides you with information about the aircraft's altitude above the ground. The Attitude 'Indicator' (its literal name) provides you with information about the physical orientation of the aircraft (nose, wings and tail) with respect to the horizon. The Turn Coordinator provides you with information about the aircraft's rate of turn and the aerodynamic 'balance' of that turn. The Directional Gyro or Heading...
So you will be teaching this?
  • #45
  • Feb 12, 2020 5:48pm Feb 12, 2020 5:48pm
Quoting milicentfx
{quote} Can you predict where a trade will end and reverse? Thanks for this BTW

I can infer from the System when the market is exposing itself as a reversal candidate. Here's a pic of that:

Attached Image (click to enlarge)
Click to Enlarge Name: Long Reversal Candidate.png Size: 96 KB


One might say, how could this be a reversal candidate for a Long trade. The answer comes in the output from D1, W1 and in this case, MN1. Those values reaching 100% or that have exceeded 100% are my first set of clues. Those are all to the Short side and most of the Targets (Trgt in the system) have been depleted. So, that tells me that the market could be approaching over extension to the downside. The rest is in the details of the System's output itself and the way in which is stacks itself together over time. In this case, I will be looking for Rotation in the DR output and in particular, whether or not the market will decide to go into horizontal consolidation before reversing Long, or whether it will use that horizontal rotation to accumulate more Shorts.

What I'm looking for is Compression and Rotation to the upside in GMMA, TripleStoch and RPD Profile. If that is supported by the Stealth group (OmegaWave, TCDi7 and DistinctVega), then the historicity of that condition (using this specific System configuration file) includes a higher probability for enough Magnitude to push the market higher and through a target that satisfies my needs.

So, your question involves defining what a "Trade" means. This is why I trade using a Revenue Model containing a Minimum Target Requirement. Once I get that MTR, I'm done for the day, unless the Panel shows me a reason to remain and collect more MTR.

The other thing that needs to be understood is that this is FX. We are witnessing the start of a brand new Trading Year. That means the Annual Magnitude is now starting to expand. Currency Pairs, if you go do the research, can move thousands of pips per Year. That's huge Magnitude and it means that your Signals needs to include the potential for larger bars like the Annual Bars to expand. No different than an M1 Bar that must also expand. So, if you get caught out of position on a rapidly expanding Annual Bar, your trade could be blown out of the water and recovery from that trade made more difficult.

This Trading System is primarily based on a different kind of trading concept that I call Delta Trading. Part of which I explain in a post above where I showed what was taking place in GBPCHF yesterday. I can't cover the details of it here, but the concept is based on using Indicators that are built from Deltas in Price Data. That's simply taking the Delta (difference) in value between two or more Data Points in the OHLC stream. Those Deltas have meaning in the market, they can be measured, evaluated, analyzed and used to determine Market Magnitude in all time frames along with certain elements of Timing and Direction. The Probability comes through the Integration of these Indicators into a cohesive whole that supports a trade decision.

So, for EURAUD, I'd be holding Short if I were already in it and preparing for Long reversal if I were not. If I were a purely Directional Trader.

To trade the SwapCycle (if you've been keeping up on the thread), I'd have to wait for the market to produce a Compressive Phase in the GMMA Module, as I have already missed the Expansive Phase of ERUAUD which took place earlier today. So, the next bus station to board a SwapCycle won't come until the GMMA Compressive Phase begins. For that, I'd be looking at the GMMA Stack Height, Slope and Micro TCD. I'd then look to see if RPD Profile's Raw output confirms the phase initiation. If I don't get at least that much in the Panel, I won't launch a new SwapCycle.
  • #46
  • Feb 12, 2020 5:49pm Feb 12, 2020 5:49pm
And, no sooner than I make the post - there you go. She blew her fuse Long, just as anticipated.

This has a newsy signature to it, though. Lots of spiking going on here.
  • #47
  • Feb 12, 2020 5:52pm Feb 12, 2020 5:52pm
I love volatility. Its a beautiful thing. So Swappable.
  • #48
  • Feb 12, 2020 5:54pm Feb 12, 2020 5:54pm
Quoting milicentfx
{quote} So you will be teaching this?
No. I'm merely passing through Forexfactory on a little break from trading. I see certain posts that interest me and I try to contribute. I have my hands full with managing my own capital.
  • #49
  • Feb 12, 2020 5:58pm Feb 12, 2020 5:58pm
A opportunity missed:

Attached Image (click to enlarge)
Click to Enlarge Name: Missed Opportunity.png Size: 99 KB


She moved right when I was finishing up my post. At least the post describes the outcome before the move. Can't post and trade at the same time. Still looks newsy, though. Anybody got any news on EURAUD?
  • #50
  • Feb 12, 2020 6:14pm Feb 12, 2020 6:14pm
Quoting JetTrader
{quote} No. I'm merely passing through Forexfactory on a little break from trading. I see certain posts that interest me and I try to contribute. I have my hands full with managing my own capital.
I see thanks
  • #51
  • Feb 12, 2020 6:20pm Feb 12, 2020 6:20pm
Quoting JetTrader
A opportunity missed: {image} She moved right when I was finishing up my post. At least the post describes the outcome before the move. Can't post and trade at the same time. Still looks newsy, though. Anybody got any news on EURAUD?
Aussie bank guy talking....red news.....spike occured 15 min prior
  • #52
  • Feb 12, 2020 6:25pm Feb 12, 2020 6:25pm
Quoting KeenPips
Hey mate! If an indicator gives you an edge in the market, that will be an interesting thing to hear. I humbly differ. But as to using indicators in a more effective and efficient manner see my second post, post #35 above. Trade safe. KP {quote}
Yes, I agree. Lots of different ways to get it done, Keen. Good Trading to you, too!
  • #53
  • Feb 12, 2020 6:28pm Feb 12, 2020 6:28pm
Quoting milicentfx
{quote} Aussie bank guy talking....red news.....spike occured 15 min prior
Yeah, the data looked irregular and newsy. Thanks.

In that case, this post did showed the market before the move: https://www.forexfactory.com/showthr...8#post12751558
  • #54
  • Feb 12, 2020 6:36pm Feb 12, 2020 6:36pm
Its interesting that when comparing a flight plan against the 'market maker' or algo as i prefer, both present pretty much the same thing.
Both accelerate, rotate..climb...off the gas for noise abatement, step climb, TOC, cruise and then descend at higher rate of knots than the initial climb...all we have to do is identify TOC and Landing/takeoff to have an edge...and its presented on a chart everyday, each time frame, each pair..
  • #55
  • Feb 12, 2020 6:40pm Feb 12, 2020 6:40pm
Quoting JetTrader
{quote} In an aircraft, the Airspeed 'Indicator' (its literal name) provides you with information about your speed through the air. The Altimeter provides you with information about the aircraft's altitude above the ground. The Attitude 'Indicator' (its literal name) provides you with information about the physical orientation of the aircraft (nose, wings and tail) with respect to the horizon. The Turn Coordinator provides you with information about the aircraft's rate of turn and the aerodynamic 'balance' of that turn. The Directional Gyro or Heading...
I do really enjoy the concept explained, I just wish all of these can be taught here so we can become better traders. Sigh...
  • #56
  • Feb 12, 2020 6:41pm Feb 12, 2020 6:41pm
Quoting viptrading
{quote} Hi Wavegarrick. This thread was not meant to be a discussion about my trading method, I have a separate thread regarding that in the trading systems section. I made this thread to be a discussion about indicators and why or why not they do not work.
Here's another indication of what's happening in the bigger picture:

Attached Image (click to enlarge)
Click to Enlarge Name: Big B2I Pic.png Size: 105 KB


Long term, I'd be working my way back to the upside on EURAUD. However, there will be some resistance and it looks like the ride back up will be highly volatile given the news just posted about the the bank that backs the AUD.

This is another Indicator. It shows an interesting kind of Geometry inherent in the market. Unfortunately, this little gem is not in the System Panel. If you notice, the Panel spans the entire screen from left to right. RPD Profile sits at the right edge and there was simply not enough room to include this Indicator, though I really did want to find a way to do it at the time the decision was made. This Indicator is called B2i and I use it primarily for Targeting. Other elements from the Panel are used for Timing, Direction and Magnitude.

The Blue Line is the Fall Line. That's the current Target. The Indicator will indicate a lower Target than what you see here, if EURAUD moves below this weeks Lowest Low at roughly 1.6128. Else, the Fall Line remains the goal and that means Long EURAUD with Panel support.

As you can see, the Fall Line extends to the right of the chart out to approximately 1.25 days. That geometry means that this Fall Line could take at least 1.25 days before being struck. So, this is no fast food trade. Don't expect fireworks immediately. This is a B2i Geometric trade with Panel confluence.
  • #57
  • Feb 12, 2020 6:41pm Feb 12, 2020 6:41pm
What will you be doing on EURAUD, VIP?
  • #58
  • Feb 12, 2020 6:49pm Feb 12, 2020 6:49pm
Sorry, forgot to post the entry:

Attached Image (click to enlarge)
Click to Enlarge Name: Big B2I Pic.png Size: 105 KB


Note: This could bleed downward quite a bit, so this is not a trade for the faint of heart. It should really start to heat up once the GMMA Compression begins. I'm a bit early, but she's targeting about 128 pips total, so I'm not too concerned about temporary blow-back in the form of directional draw.

You will notice that the right side of the Panel is greener than the left side. That's by design. Or, should I say, by System Configuration. That's showing me a dimension of "Risk" that is unique to this System. In other words, this should be showing me the beginning stages of this reversal - which can be a pretty bumpy ride. So, fasten those seat belts. This is why you use a Trading System.
  • #59
  • Feb 12, 2020 7:10pm Feb 12, 2020 7:10pm
Quote
What will you be doing on EURAUD, VIP?

I'm not in that trade. EUR seems weak so it's not a bad idea. The entry is good technically also. My only issue is AUD. Australia is also weak fundamentally and maybe arguably weaker than EUR at the moment.

I'm long GBPAUD though.
  • #60
  • Feb 12, 2020 8:00pm Feb 12, 2020 8:00pm
Quoting viptrading
{quote} I'm not in that trade. EUR seems weak so it's not a bad idea. The entry is good technically also. My only issue is AUD. Australia is also weak fundamentally and maybe arguably weaker than EUR at the moment. I'm long GBPAUD though.

I see.

In that case, expect some major instability in Direction for these reasons on GBPAUD going forward and for quite some time:

Attached Image (click to enlarge)
Click to Enlarge Name: Major Volatility on GBPAUD.png Size: 57 KB


This pair is now in a state of Directional flux. It sits between two rather large scale areas of attraction above and below current price. Trading this pair won't be impossible right now, but it will require a ton of skill. All the best with this one. You picked a beast to manage. When the price warping directional volatility kicks in, you'll know what I mean and you can refer back to this pic.

I would trade this pair only after it cleared 1.8948 to the downside and 1.9650 to the upside - if I were a no indicator, price chart only Trader.
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