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Indicators... The Beautiful Lie

  • #41
  • Mar 31, 2009 11:35am Mar 31, 2009 11:35am
Quoting juandeseta
Also your comment is a contradiction.
"In no way does it measure liquidity, In actual fact the larger the ATR the less liquidity was likely over those prices."
Make up your mind.
I changed the post to more accurately portray what I think.
Living the adventure in my head.
  • #42
  • Mar 31, 2009 11:40am Mar 31, 2009 11:40am
Quoting juandeseta
Leonlorenzo, actually if there are less participants in a market then obviously moves will be more pronounced (ie higher volatility ) because there are less people able to accept the different ranges in price. Conversely, if the are more participants the "granularity" if you like is higher and therefore price is more stable and less volatile.
Go read up.
This is patently false. If there is low liquidity, individual traders are able to move the market easier, but it does not necessarily mean that they will. If there is a lot of liquidity you can also still see high volatility from more participants getting into and out of large trades.

Look at any friday, sometimes you will see extremely volatile days with huge moves, sometimes you will see very tight range trading with little action.

Quoting juandeseta
Guys, all I'm saying is people put to much weight on indicators. I would also like to say I'm not bashing indicators because they failed me, I make money without them. Also, I see people feel it's fashionable to bash indicators... why then has not one single person taken my stance. I think "you may have the bull by the udder".
I think most of us are agreeing with you here, if you reread the posts in this thread. As for indicator bashing, I believe it's just a general feeling in the forums, I'm not sure why you think one thread with about 10 different participants is indicative of what has been going on in the forums as a whole.

Quoting juandeseta
MACD--> The difference between two moving averages, and a logical way to measure momentum. Again, all it can tell you is that the markets momentum is changing. If it's slowing down it could be getting ready for a reversal or a consolidation, or a renewed burst in its original direction.

Now... All these things you can see with the same accuracy using only your eyes!!!!!
See, this second statement has been made already by us. I specifically pointed out that you don't need an indicator to tell you we're in a range, or we're trending, but the whole point of the thread is that they can HELP tell you these things if you know how to use them properly. If you don't need them, don't use them, that's fine. No one is going to call you stupid for not using indicators if you are profitable, and I'm sure the people who are profitable while using indicators would appreciate the same respect.
  • #43
  • Mar 31, 2009 11:42am Mar 31, 2009 11:42am
Quoting juandeseta
Ok, real slow........
you say high ART = less liquidity.....
this is an indirect relationship.....
Did you do maths??

So we are actually saying the same thing. The only differences are that I miss-understood your wording and you decided to insult me afew times(indirectly, lol).
Living the adventure in my head.
  • #44
  • Mar 31, 2009 11:45am Mar 31, 2009 11:45am
Sorry bout that.... Got a bit irritated.
No hard feelings
  • #45
  • Mar 31, 2009 11:46am Mar 31, 2009 11:46am
Quote
Also, I see people feel it's fashionable to bash indicators... why then has not one single person taken my stance.

3 reasons:
1. Why post just to agree w/ the O.P?
2. Why post when there's a flood of posts against you?
3. Serious traders know it's all subjective anyway.

But there's a whole army of people out there that want to rag on indicators. These are mostly people that used to use indicators unprofitably, found a little price action, made a little money, and have gone evangelical.

There's a point where that ends and some people go back to indicators, using them in a very different way. It's all subjective tho. Do you need them? Of course not. Can they be profitable? Sure. Everyone's brain works differently.

Quote
you say high ART = less liquidity.....

Semantics.

ATR = Average True Range. It's a little formula to measure the current range of the market. It's not so much the formula that matters, but that you're consistent in your usage. I prefer high-low instead of ATR, but that's just me.

Liquidity and volatility tend to be inverses. Tend to be. Loose correlation. But it's all subjective. If you have 4x the number of traders in the EURUSD as you do the GBPUSD, and half of them pack up and leave, then liquidity goes poof, volatility skyrockets, but there's still more traders than the GBPUSD. It's relative.

So yea, ATR can be a loose (inverse correlation) measurement of liquidity.

Quote
Why do you think spreads are so tight for EURO/USD--> most liquid
Why is the Rand/USD so volatile --> low liquidity

That's only a half-truth. Spreads are more complex than that. At some point they do indicate liquidity (short term liquidity tho, not delta long term liquidity as delta ATR would indicate), but only if you're trading on an ECN.
  • #46
  • Mar 31, 2009 11:52am Mar 31, 2009 11:52am
Why trade naked...... when you can trade Versace?
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  • #47
  • Edited 12:12pm Mar 31, 2009 11:55am | Edited 12:12pm
As is typical with these threads there never is an overly convincing point made either way. That is, to make one say "Ah hah! There is (no use/absolute use) for indicators!" Having said that, Craig makes another very fine point, as usual, in his response. But, I look at indicators as others have made mention in the past, though I never really understood until recently; as a dance partner. Sure, I could dance alone, many do. I could dance with one partner, or perhaps even two, the problem is created when one starts dancing with three, four, five partners... you can't even tell what you are doing any longer. If you can, don't flame me, the majority can't, nor is there any true purpose I have ever seen for such a thing.

I started out not believing in indicators, then I started placing them all over my screen, now I use one 300+ MA. Interestingly, I still don't "believe" in indicators. As, I don't believe those who move and manipulate the market stare at such things. The MA serves the same purpose as what others could use consecutive higher highs or lower lows for, or one could use a trendline for, that is... deciding when a trend begins or is likely to. It is just a matter of my personal preference to use an MA for such a thing. So, in that instance, I use indicators unlike Craig, even though I do agree that what he said is the only really logical reason of using a specific indicator for a specific purpose. But then, so long as you dance well, be it alone or not, who really gives a snort?

Quoting magnumfreak
And as soon as you can get your "eye" to send you a text message when you are not sitting in front of the computer, then I will be impressed.
This is a rather good point. However, there are ways around this. One could use price inputs into a spreadsheet to send such a signal, as Excel could see such candle breaks or breaks out of a range and so forth. Still, I don't see how it matters all that much. One can't deny that people do trade and often trade well using indicators. Most fail whether they use strictly price or anything else, the key is to make money.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #48
  • Mar 31, 2009 11:59am Mar 31, 2009 11:59am
So rather than go back and forth about how indicators work or this method is better than the next, why not just start your own thread and teach people your great and wonderful method.

It serves no real purpose to come here saying that indicators are inefficient or don't really work except to stroke your ego unless you can prove that fact. And not by just cherry picking a few examples. Right now you are just pumping your fist and snapping at anyone who disagrees with you in any way.

And as soon as you can get your "eye" to send you a text message when you are not sitting in front of the computer, then I will be impressed.
  • #49
  • Mar 31, 2009 12:01pm Mar 31, 2009 12:01pm
http://manofest.com/index.php?option....html&Itemid=1
  • #50
  • Mar 31, 2009 8:29pm Mar 31, 2009 8:29pm
Quoting magnumfreak
So rather than go back and forth about how indicators work or this method is better than the next, why not just start your own thread and teach people your great and wonderful method.

It serves no real purpose to come here saying that indicators are inefficient or don't really work except to stroke your ego unless you can prove that fact. And not by just cherry picking a few examples. Right now you are just pumping your fist and snapping at anyone who disagrees with you in any way.

And as soon as you can get your "eye" to send you a text...
Good one!! Let hope to see something....
  • #51
  • Mar 31, 2009 8:40pm Mar 31, 2009 8:40pm
One man's trash is another man's treasure. Such is the nature of indicators. The indicator is not the one to blame.
TRO
  • #52
  • Mar 31, 2009 8:56pm Mar 31, 2009 8:56pm

So indicators are

1) slow
2) and therefore impede your performance
3) Self validating due to infinite arrangements
4) Give you confidence when you shouldn't have any
5) Help you become a sucker

I think you meant SOME indicators are...

Not all indicators are slow. Some are right on time...

http://i43.tinypic.com/mcgj8l.gif
TRO
  • #53
  • Last Post: Apr 8, 2009 8:21am Apr 8, 2009 8:21am
Thanks for your post.
i simply do not agree with extremists. i believe the best system is a mix of all techniques and analyses
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