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Indicator education

  • #1
  • First Post: Dec 22, 2006 9:39am Dec 22, 2006 9:39am
Having an understanding of a particular indicator, especially if it has been applied as a strong basis for your trading strategy is important. Knowing if it is a, Leading, Lagging or momentum indicator and an understanding of it's logic will provide you with more confidence in the indicator. Also what it should be used for.

This is just one link to a resource for understanding indicators and overlays. I would highly recommend it.

http://www.stockcharts.com/education...sis/index.html
  • #2
  • Dec 22, 2006 10:51am Dec 22, 2006 10:51am
Quoting Markj
Having an understanding of a particular indicator, especially if it has been applied as a strong basis for your trading strategy is important. Knowing if it is a, Leading, Lagging or momentum indicator and an understanding of it's logic will provide you with more confidence in the indicator. Also what it should be used for.

This is just one link to a resource for understanding indicators and overlays. I would highly recommend it.

http://www.stockcharts.com/education...sis/index.html
Thanks very much for sharing this with us. It is a great source. Did you know that John Murphy publishes market messages on their website? The messages are not free though.
  • #3
  • Dec 22, 2006 10:55am Dec 22, 2006 10:55am
thanks alot!!!
CRAIGSLIST BARTERING CHAMPION
  • #4
  • Dec 22, 2006 11:46am Dec 22, 2006 11:46am
Good basics lists but "Leading Indicators" they are not. There is no such thing. Price leads - nothing else can. Because all indicators are based on price, it cannot itself lead price.
Every lagging and so-called "leading" indicators are about probabilities. CCI/RSI/Stochastic Etc maybe better than Moving Averages Etc but it does not lead price.
  • #5
  • Dec 22, 2006 1:10pm Dec 22, 2006 1:10pm
Quoting SunTrader
Good basics lists but "Leading Indicators" they are not. There is no such thing. Price leads - nothing else can. Because all indicators are based on price, it cannot itself lead price.
Every lagging and so-called "leading" indicators are about probabilities. CCI/RSI/Stochastic Etc maybe better than Moving Averages Etc but it does not lead price.
Suntrader,

I guess this comes down to the argument of influence that technical analysis has over the market. For does price lead a pattern or pattern lead the price. Or does price fall based on overvalue suggested by an indicator or does it just fall based on bad fundamentals.

It's an interesting subject.
  • #6
  • Dec 22, 2006 1:15pm Dec 22, 2006 1:15pm
Quoting aparsai
Thanks very much for sharing this with us. It is a great source. Did you know that John Murphy publishes market messages on their website? The messages are not free though.
Aparsai,

It,s a good resource.

I did and I think they are mainly for the indexes.
  • #7
  • Dec 22, 2006 10:51pm Dec 22, 2006 10:51pm
It is very basic: Price moves up when sellers are no longer as anxious to sell. Buyers get encouraged, New buyers get anxious to buy. Price pushes higher till most buyers are no longer anxious to buy. You know what happens after that.

Patterns/Indicators do work some of the time. But the amount of change in price that they (might) cause is incidental.

Patterns develop and indicators squiggle based on price. Not vice versa.

Just IMO. You don't have to agree. I'll still say merry xmas from one sunny place to another.
  • #8
  • Last Post: Dec 22, 2006 10:56pm Dec 22, 2006 10:56pm
Suntrader is completely correct, 'leading indicators' are fantasy BS used to lure new traders into BS systems.
The breaking of a wave cannot explain the whole sea.
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