Indicators: Good AND Bad

I see low # post members doing what I feel to be glomming onto the idea that Indicators are bad for your personal economy;
Accepeted that there may be a few posts suggesting..
All of them..

I want your proof !
Pick a popular indicator and prove it wrong.
Please include Timeframes.

I think the statement should be "Pick an indicator, and prove it right."

The only indicator that looks interesting to me is RSI because it can keep you out of overbought/oversold situations. BB are nice for this too.

Let's cut through the chase: indicators are lagging and those who push them are full of hype... especially when fundamentals will trump any TA.

I try to keep an open mind.... Kevin E's Sentiment Index may have some value. Check out his Nonfarm payroll backtests.... most impressive to this point. I have not had time to verify the correctness of the indicator though...

I have not REALLY used the RSI till now. Could you please explain how it can keep you out of over bought/sold situations. Thanks

My interpretation:

RSI(14) on the hourly above 70 is overbought, below 30 is oversold.

It really matters on your timeframe. Maybe RSI(21) on the 4 hour is a better choice. I really don't know because I only look at the hourly for now.

I use this for the EURUSD, and use hourly RSI(96) > 55 and RSI(96) < 45 to indicate the market trended strongly, bullish or bearish respectively.

These are by no means the "best" way to use RSI, but with my limited time backtesting them, they appear on the right track.

Thanks Tdion. Will have a look at it tomorrow.
Will come back if I have more question

Sounds like an interesting comparison. Would yo like to start a thread based on that concept or prefer to hijack this one?

Check it out...

Forget to add.
Please do not ask about RSI to me. I’m not RSI fan. Somebody in FF (I forget his name) is very2 good on RSI. Maybe you can check search to find his post. I read his method to employ RSI, very impressive.

lol.. wrong side of the bed today Bemac??

I think any type of analysis is what you make of it! I read somewhere (don't remember where) that most pros use a mixture of technical analysis and fundamentals. Even TA can stand aside at times if the fundamentals are showing opposite information - altho I do believe that TA takes the fundies into account in many cases - and the ones that do not are taken into consideration developing an indicator based system (counted as just part of your losses!)

Just my .02c!

D.

That proof can never be given. If one person uses just the 200 SMA to place trades off of a 1hr, 4hr chart etc (as I am sure some do), the next will try to use the 200 SMA to no success. Then say it does not work. This reality happens all the time here at FF. I, as have everyone else, seen systems posted here that unless the original poster is lying ... are working for at least one person. Dozens of people flood the thread then with filters (more indicators that are the same but different than what is already there) and suggestions. Then after two or three weeks (if not days) say that the system does not work. This occurs because it isn't really the indicators that .. well "work". It is the trader.

If trader A uses a 200 SMA to place his trades and has a 70% win rate, is it actually the 200 SMA that is doing it for him? I don't think so. However, that trader if the 200 SMA is taken away will not feel as comfortable and guided and may suffer in his trading performances. This is how, at least I believe indicators "work". This is also a mystery I myself can't understand very well. Considering that this veteran trader could likely tell you within 10-15 pips where that 200 SMA would be at any given time.

I personally feel a bit lost when looking at a blank chart. I know what the MACD would be doing and I know what the EMA would be doing. Yet I have yet to figure out why I feel lost. Since I do not trade with SLs, I need a limit that will tell me "Boy, now is the time to get out if you haven't done so already. If you don't this may be a bad week for you." The same goes for entrances. "Boy, if you had not put in your short or long yet you better do that now. Otherwise you will be kicking yourself when this is 200 pips in your direction." I very rarely wait for actual "signals", given that the system I use is a money pit if followed blindly, though, it is an extra visual that clearly writes out what I should be looking to do.

Stepped in the chanty at that
Please continue.

i hate the Rsi the most its like a pinocio, it lies a lot, i check it when dealing with weekly or daily chart, for lower times frames i replace it with stohastics, to enter & exit i like the pars the most....they are telling me its time for action ... in this order: pars, fibo, stohastics, MAs, S&R lines, ...maybe bollinger or fibo fan..

Thank you.
I have both the MTF and the standard one. I just did not know how ppl apply it. Will try to find it out. Thanks again. By the way, does thie RSI indicator also exist in histogram form?

Thanks

Bemac Im not proving my best indicator's wrong... Infact they are my Mr. Right ... Yea Im tALKING ABOUT P-SAR Dots... Coz i love this one & its the most important part of my own strategy...
Then SSTO ... another excellent Indicator + RSI .... & no comments after them all ....

The best indicators?

Your eyes and brain.

Hey This was my MOTO in past lol....

Yea ur right the best indicator is our eye's and brain but these things are additional & boast our mind and eye's alot ....