Which indicators should be used to minimize losses | Forex Factory

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Which indicators should be used to minimize losses

  • #1
  • First Post: Feb 24, 2011 10:05am Feb 24, 2011 10:05am
Hi friends! this is like a bad movie, pretty funny afterwards but whata hell,
I can take a loss but this is how I felt when it happend LOL,
I find that most indicators and forex don't go so well together,
first I like to say I am realtively new to forex,
I have been trading fx for about 6 month now,
and what I have found is that most indicators are totally useless,
like yesterday, I found a brake of a trendline, and also a brake of the last high,
so I thought, good buy signal! THE DOWNTREND IS BROKEN! HALLELUJA!
I didn't want to enter at the top so I waited for a retrace,
MACD was showing buy and the ADX was rising,
and I got a crossing of the + line over the - line,
and the stochastic was showing well oversold,
so good entry point right? BAM! IM BUYING!
and guess what happends next, everybody start to sell off like crazy :O whaat??
totally unreal and no news out that could have caused this,
I saw one HUGE down bar forming after the other and I thought to my self,
what did I do to deserve this?? OMFG! feeling I am the unluckyest guy alive,
why is this allways happening to me?? WHY! WHY! I must be cursed or something,
what kind of indicators do those sellers use??? or are they plain nuts!? which I don't believe,
who would sell when all the indicators showing green light? on several timeframes,
in the fx world I have learnt these things are happening time after time,
lucky for me I had a stoploss in, but I still lost so much that it did HURT!,
I guess I have a lot to learn, this brings me into the question I first tought of,
I want to ask you what kind of indicator you use when trading forex, if any?
what do you use for entry and sell points?
Bulls are stupid Animals!especially when Im short!
  • #2
  • Feb 24, 2011 10:18am Feb 24, 2011 10:18am
As far as i'm concerned indicators are useless.
I use only horizontal support/resistance lines (and trendlines and fibonacci retracement but only as confluence).
  • #3
  • Feb 24, 2011 10:21am Feb 24, 2011 10:21am
I am the same. I don't use indicators. They are lagging and useless in my view. I see it that all they are useful for is to give a trader confidence that their view of what was happening with price action is correct.

Pure price action trading with support and resistance is my game.
Trade price action
  • #4
  • Feb 24, 2011 11:03am Feb 24, 2011 11:03am
Hey Roughtrader,

If you dislike indicators, you might enjoy this thread. http://www.forexfactory.com/showthread.php?t=57639

It's a long read, but well worth it.

Good Luck
  • #5
  • Feb 24, 2011 1:07pm Feb 24, 2011 1:07pm
Quoting roughtrader
I want to ask you what kind of indicator you use when trading forex, if any?
what do you use for entry and sell points?
you ask the wrong questions. Let's try it with a metaphor.
Without proper knowledge of human anatomy and medicine, all the tools for performing operations will be completely useless to you - instead of saving the patient you will kill him.

now, "human anatomy and medicine" is the market and market participants. The tools for performing operations are the "systems with an edge", and finally the patient is your "account".

In other words, without proper knowledge of the market, you will not be able to make it in this business, no matter which combination of indicators you use.

cheers and good luck
  • #6
  • Feb 24, 2011 1:25pm Feb 24, 2011 1:25pm
I don't get the problem. You made a call, and it was wrong. So get out. This happens to me a lot. Losers happen. If you trade long enough, you will have a string of losers.... maybe 10-20 in a row. You will think you cannot do anything right. No problem. You know losers can and WILL happen, and you trade accordingly. It is important to have a TP level before you enter a trade, but it is VITAL to have a stop-loss level before you enter a trade. A stop-loss that is hard, fast, and will not be moved by you in the heat of dispair. If you cannot accept a loss, and if you cannot stick to a pre-determined stop loss level, you are doomed in trading.

Regards,
  • #7
  • Feb 25, 2011 8:15am Feb 25, 2011 8:15am
Quoting Custos
you ask the wrong questions. Let's try it with a metaphor.
Without proper knowledge of human anatomy and medicine, all the tools for performing operations will be completely useless to you - instead of saving the patient you will kill him.

now, "human anatomy and medicine" is the market and market participants. The tools for performing operations are the "systems with an edge", and finally the patient is your "account".

In other words, without proper knowledge of the market, you will not be able to make it in this business, no matter which...
that is very true, and you are right, I will be working hard to become doctor forex in the future, but you got to start somewhere
Bulls are stupid Animals!especially when Im short!
  • #8
  • Feb 27, 2011 4:59am Feb 27, 2011 4:59am
The only leading indi that I know is BB set at 20/2 .It is the only indi that tells me where the money is. Maybe your problem is you trade to soon. Over sold does not mean price will reverse unless it is supported by a higher tf. I only trade m15/m30..here is an example of a trade I took on friday. My setup is based on m15 but is supported by m30. To trade always make sure 1-2 tf higher is supporting you.

GL and trade safe
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  • #9
  • Feb 27, 2011 8:04am Feb 27, 2011 8:04am
Quoting roughtrader
Hi friends! this is like a bad movie, pretty funny afterwards but whata hell,
I can take a loss but this is how I felt when it happend LOL,
I find that most indicators and forex don't go so well together,
first I like to say I am realtively new to forex,
I have been trading fx for about 6 month now,
and what I have found is that most indicators are totally useless,
like yesterday, I found a brake of a trendline, and also a brake of the last high,
so I thought, good buy signal! THE DOWNTREND IS BROKEN! HALLELUJA!
I didn't want to enter at...
Hi, what you’ve described is not an indicator problem. For entry and sell points you must have a proven method that gives you statistical edge over series of trades, otherwise you’re just entering and exiting randomly. You have to address this problem first, because even with moving averages and momentum indicators on dual timeframes it should be possible to produce a profitable system. However to develop system/methods based on indicators, you need to have experience and understand how the markets work, which new traders don’t have.


What majority of people need to realize is that indicators are derived from O/H/L/C prices, and even price bar/candle itself is inferior and does not represent the market. Price bar/candle gives you only data points (O/H/L/C) and for example it doesn’t show you how much activity occurred at each price point, or whether majority of the traders were buying or selling at each specific data point, or it doesn’t show you the conviction of the traders, and so on.



In other words, even pure price itself gives rather limited information, and if you use indicators, then basically the indicator manipulates the prices and you end up with some meaningless squiggly lines on your chart which only confuse you and give you false sense of confidence.



Sure, indicators can be used but more less only as a filter to confirm what price is telling you. Keep it simple, and the fastest way to learn to read the market is to use only bar/candle charts without any indicators, and apply basis technical trend analysis, such as;

 

  1. Peak and trough analysis
  2. Support and resistance
  3. Trendlines
  4. Price patterns
  5. etc.......

My advice to you is to keep it simple with classical technical analysis, and keep away from indicators till you’re able to read price from pure charts. Once you get proficient, then you can perhaps throw in few momentum indicators that are actually leading, and not lagging :-) Just keep it simple, and start working on consistency instead, of wasting your time with
indicators.

Good luck :-)

  • #10
  • Feb 28, 2011 9:39am Feb 28, 2011 9:39am
Myrza - "The only leading indi that I know is BB set at 20/2 .It is the only indi that tells me where the money is. Maybe your problem is you trade to soon. Over sold does not mean price will reverse unless it is supported by a higher tf. I only trade m15/m30..here is an example of a trade I took on friday. My setup is based on m15 but is supported by m30. To trade always make sure 1-2 tf higher is supporting you".

HI Myrza

What is the WPR, as in what is it a derivative of ?

Thanks
  • #11
  • Feb 28, 2011 10:01am Feb 28, 2011 10:01am
Indicators are nothing more than a derivative of price. Do away with the indicators and focus on price action. Actually, when it comes to FX it is even more complex than just price action. Not only do you have price action to consider, but you have the day of the week considerations, as well as the day of the month, economic report impacts, time of day, time of year, etc.. There are many other variables also, and the best trades take an enormous amount of patience to fully capitalize on them. To think that you can summarize all of those variables with just an indicator or a set of indicators is laughable to me. Personally, I don't believe in using indicators.....however I do believe in using "tools" such as support/resistance, fibonnacci, and moving averages. These tools allow me to assess the market in a relative sense. I use them in conjunction with all the other market variables that I mentioned previously.
  • #12
  • Feb 28, 2011 12:12pm Feb 28, 2011 12:12pm
Quoting roughtrader
I have been trading fx for about 6 month now,
and what I have found is that most indicators are totally useless,
like yesterday, I found a brake of a trendline, and also a brake of the last high,
so I thought, good buy signal! THE DOWNTREND IS BROKEN! HALLELUJA!
I didn't want to enter at the top so I waited for a retrace,
MACD was showing buy and the ADX was rising,
and I got a crossing of the + line over the - line,
and the stochastic was showing well oversold,
so good entry point right? BAM! IM BUYING!
and guess what happends...
Don't change indicators. I admire your ability to stick to one trading procedure. Rerun your indicators thru data to find its weaknesses besides the one you just found; else, you may have to repeat post#1 with another indicator (source):


admittance
"Hi friends! this is like a bad movie, pretty funny afterwards but whata hell,
I can take a loss but this is how I felt when it happend LOL,
I find that most indicators and forex don't go so well together,
first I like to say I am realtively new to forex,"

--> acceptance
"like yesterday, I found a brake of a trendline, and also a brake of the last high,
so I thought, good buy signal! THE DOWNTREND IS BROKEN! HALLELUJA! "

--> compliance
"I didn't want to enter at the top so I waited for a retrace,
MACD was showing buy and the ADX was rising,
and I got a crossing of the + line over the - line,
and the stochastic was showing well oversold,
so good entry point right? BAM! IM BUYING! "

defiance
"and guess what happends next, everybody start to sell off like crazy :O whaat??
totally unreal and no news out that could have caused this,
I saw one HUGE down bar forming after the other and I thought to my self,
what did I do to deserve this?? OMFG! feeling I am the unluckyest guy alive,
why is this allways happening to me?? WHY! WHY! I must be cursed or something,
what kind of indicators do those sellers use??? or are they plain nuts!? which I don't believe,
who would sell when all the indicators showing green light?"

surrender
"on several timeframes,
in the fx world I have learnt these things are happening time after time,
lucky for me I had a stoploss in, but I still lost so much that it did HURT!,
I guess I have a lot to learn, this brings me into the question I first tought of,
I want to ask you what kind of indicator you use when trading forex, if any?
what do you use for entry and sell points?"

You got really excited about an imperfect indicator set trying to divine the future about a near-unknowable/undefeatable market. Please, help yourself; nobody else is going to tell the details of a really good trading system, only tell you of an okay system or tell you what details that aren't too internalized of a really good trading system.

It's like, you can't run a lawnmower over branches; same with your indicator set. Treat them right, and they'll return the favor.

Good luck trading.
  • #13
  • Mar 1, 2011 3:29am Mar 1, 2011 3:29am
I think that custom forex indicator is an important tool for an investor. A custom forex indicator helps you in making the right moves in the trading market and tells you when is the right time for buying and when it is not.
  • #14
  • Mar 1, 2011 4:10am Mar 1, 2011 4:10am
Quoting Custos
you ask the wrong questions. Let's try it with a metaphor.
Without proper knowledge of human anatomy and medicine, all the tools for performing operations will be completely useless to you - instead of saving the patient you will kill him.

now, "human anatomy and medicine" is the market and market participants. The tools for performing operations are the "systems with an edge", and finally the patient is your "account".

In other words, without proper knowledge of the market, you will not be able to make it in this business, no matter...
I think this basically sums up this entire thread... like a lot of other people here i'm relatively new to forex, but i can tell i simply don't have the knowledge to understand indicators like some of the people with more experience do.

hopefully i'll get there
  • #15
  • Mar 1, 2011 10:57am Mar 1, 2011 10:57am
Quoting 82nd
Myrza - "The only leading indi that I know is BB set at 20/2 .It is the only indi that tells me where the money is. Maybe your problem is you trade to soon. Over sold does not mean price will reverse unless it is supported by a higher tf. I only trade m15/m30..here is an example of a trade I took on friday. My setup is based on m15 but is supported by m30. To trade always make sure 1-2 tf higher is supporting you".

HI Myrza

[font=Comic Sans MS][size=1][color=royalblue]What...
wpr is similar to stoch but is much more sensitive to price movement. It is an essential tool for me to scalp at lower time frame. What I normally look in my setup is stoch divergence at the ceiling of bb and wpr overbought and crosses below -20 to sell and vice versa. Wpr is also much more sensitive in detecting oversold /overbought condition as compared to stoch. The ultimate setup is a harami at the ceiling/floor with wpr crosses. Here are some examples of todays Yuro trades
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  • #16
  • Last Post: Mar 2, 2011 3:18pm Mar 2, 2011 3:18pm
Quoting claree
I think that custom forex indicator is an important tool for an investor. A custom forex indicator helps you in making the right moves in the trading market and tells you when is the right time for buying and when it is not.
can you please tell me where to get one?
Bulls are stupid Animals!especially when Im short!
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