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What indicators to use?

  • #1
  • First Post: Nov 8, 2011 12:27am Nov 8, 2011 12:27am
Ok. So I trade mostly using just S&R lines, candlestick patterns, pivots, and pretty much mostly naked trading just paying attention to price action and comparing all timeframe charts... But I was wondering what indicator would you guys highly suggest I implement in my trading? I read that a lot use RSI or Stochastic... any way for me to use them efficiently (or other ones) ?

What kind of methods do you guys use to trade by the way? Or any particular trading system on this forum that you'd highly recommend I look into?
  • #2
  • Nov 8, 2011 2:25am Nov 8, 2011 2:25am
Hi there, guys that use s/r, fibs and price action that also use an indicator, tend to use an oscillator, that is a momentum based indicator. They'd use it by gauging price momentum at key s/r-fibs-price action set ups to confirm to them to enter a trade.

For instance take stochastic, used by itself it's horrible, there are some guys that use it as their main tool but are very skilled at it and could probably write a small book on it lol. But for s/r-fib-price action guys, taking a stochastic momentum reversal at a key area or line may increase the probability that the stochastic cross is 'a winner'. eg. you find a triangle, price is close to the top line and stochastic is overbought, chances are the top line will hold and the stochastic cross over will be a winner.

So it boils down to gauging a turn in momentum at a key area or line to enter a trade.
  • #3
  • Nov 8, 2011 2:40am Nov 8, 2011 2:40am
Here's a good example, I found a good 7 entries on the chart.

As for other systems, a good place to start would be this thread on pa trading with indicators - http://www.forexfactory.com/showthread.php?t=276813
Attached Image (click to enlarge)
Click to Enlarge Name: pa and stochastic.gif Size: 33 KB
  • #4
  • Nov 9, 2011 2:41pm Nov 9, 2011 2:41pm
Quoting Zerix
Ok. So I trade mostly using just S&R lines, candlestick patterns, pivots, and pretty much mostly naked trading just paying attention to price action and comparing all timeframe charts... But I was wondering what indicator would you guys highly suggest I implement in my trading? I read that a lot use RSI or Stochastic... any way for me to use them efficiently (or other ones) ?

What kind of methods do you guys use to trade by the way? Or any particular trading system on this forum that you'd highly recommend I look into?
Hello Zerix,

I would say any indicator below the main chart except volume is not worth using. All indicators are lacking in one way or another. I have them on scalping charts but beyond that I use the SR's. It would be helpful to see your chart as this would tell the story of what's lacking.

Trading just one timeframe chart is also bad as it gives a very limited view. Your method of comparing the timeframes is a critical point as most traders haven't a clue to what their looking at anyway.

Anybody who trades a completely naked chart is trading with his pants down and is subject to huge problems. Everybody that told me this in the past is no longer trading because they lost their account. It was their total inability to comprehend what they were reading in books and on the internet which I admit is a confusing mess. This is due to bad traders or new traders starting threads and writing fiction.

Plain and simple you're barking up the wrong tree. Indicators won't make you a better trader but learning how to trade will.

For starters I'd visit http://www.forexfactory.com/showthread.php?t=206723.

Then I'd look at really learning how to trade Support and Resistance because if you truly understood the "how" part you wouldn't be looking for indicators but instead looking for a garbage can to put your collection. I say this because most traders have a complete misunderstanding of the definition of Support and Resistance trading.

Post your chart and we will continue. Please don't take offense as it is not intended and all good traders have been where you are now.

Have a great day,

Johnny
  • #5
  • Nov 9, 2011 3:03pm Nov 9, 2011 3:03pm
Trading with oscillators isn't good idea. It's all about cross between MA x, y and z. Better idea is searching some divergences.
Professional FX courses - ZL, SD, for beginners and advanced traders
  • #6
  • Nov 10, 2011 4:02am Nov 10, 2011 4:02am
Quoting Zerix
Ok. So I trade mostly using just S&R lines, candlestick patterns, pivots, and pretty much mostly naked trading just paying attention to price action and comparing all timeframe charts... But I was wondering what indicator would you guys highly suggest I implement in my trading? I read that a lot use RSI or Stochastic... any way for me to use them efficiently (or other ones) ?

What kind of methods do you guys use to trade by the way? Or any particular trading system on this forum that you'd highly recommend I look into?

There is not a perfect answer for that. First, you have to realize that indicators are meant to support the trader's decision process. Many traders tend to think that an indicator can predict the future, but that it is obviously wrong. Pick 2-3 indicators that work for you and do not cover the charts with them. The most important thing in technical analysis is knowing how to read the candlestick- indicators help you to do that. Personally I use (not at the same time): 200 SMA, 20& 50 EMA, stochastic and Fibonacci. Good luck!

  • #7
  • Nov 11, 2011 4:34am Nov 11, 2011 4:34am
If you know how to correctly use RSI / real MACD (not the one that comes with mt4) you can make a killer combination with , s/d , trendlines etc ...
  • #8
  • Nov 11, 2011 6:51am Nov 11, 2011 6:51am
Quoting jeanlouie
Here's a good example, I found a good 7 entries on the chart.

As for other systems, a good place to start would be this thread on pa trading with indicators - http://www.forexfactory.com/showthread.php?t=276813

The thing with those charts is that you can always find good entries and exits using nearly all of the indicators/oscillators/ methods/ tricks/ perks you can imagine. But this happens only on historical data. Everything becomes hundred time more complicated when you try using them with the chart that does actually move.
  • #9
  • Nov 11, 2011 6:56am Nov 11, 2011 6:56am
Quoting Zerix
Ok. So I trade mostly using just S&R lines, candlestick patterns, pivots, and pretty much mostly naked trading just paying attention to price action and comparing all timeframe charts... But I was wondering what indicator would you guys highly suggest I implement in my trading? I read that a lot use RSI or Stochastic... any way for me to use them efficiently (or other ones) ?

What kind of methods do you guys use to trade by the way? Or any particular trading system on this forum that you'd highly recommend I look into?

I started with very simple things. I took SMA 90, EMA 10. SMA 90 was like a general trendline to me, EMA 10 was like a signal line.

This worked well in a trending market (I traded demo). I kept losing in a flat market. I was not very good at determining the market condition back then. (and I'm not very good now, either). So I took an oscillator as a filter. I think, it was RSI. I used it to confirm (if it reached overbought or oversold levels) the signals from the crossover of SMA and EMA. The success rate climbed.

You can try out these, it's fairly simple. You can also experiment with SL / TP. For me, it was a good way to begin.
  • #10
  • Nov 11, 2011 2:39pm Nov 11, 2011 2:39pm
Don't use oscillators!

If you can earn without them, don't take them on your chart. Eventually some moving averages, but not oscillators.
  • #11
  • Nov 15, 2011 7:57am Nov 15, 2011 7:57am
Quoting VinciPro
Don't use oscillators!

If you can earn without them, don't take them on your chart. Eventually some moving averages, but not oscillators.
Why would you say that? And how do you define whether the market is trending or flat?
  • #12
  • Nov 15, 2011 11:27am Nov 15, 2011 11:27am
Perhaps you want to start to draw trend lines frequently as they will help you to know direction as well as support and resistance.

Good trends are available for less than 20 percent of the time, but you can find small trends by going to smaller time frames.

The moving averages will get further apart as the trend increases and they will move together as the trend lessens...

Perhaps you want to use three charts ie 60 min and 15 min and 5 min with the same indicators on each.... that will illustrate the cycles within cycles and help you to know direction on the faster charts.

Experiment until you find something that you are comfortable with.
  • #13
  • Nov 15, 2011 12:02pm Nov 15, 2011 12:02pm
Quoting JohnnyBSmart
Hello Zerix,

I would say any indicator below the main chart except volume is not worth using. All indicators are lacking in one way or another. I have them on scalping charts but beyond that I use the SR's. It would be helpful to see your chart as this would tell the story of what's lacking.

Trading just one timeframe chart is also bad as it gives a very limited view. Your method of comparing the timeframes is a critical point as most traders haven't a clue to what their looking at anyway.

Anybody who trades a completely naked chart is trading...
Naked trading works just fine for me, it took me years to dump all indis but now they are just a distraction.

You just met the wrong naked traders.
  • #14
  • Nov 15, 2011 12:06pm Nov 15, 2011 12:06pm
Quoting Zerix
Ok. So I trade mostly using just S&R lines, candlestick patterns, pivots, and pretty much mostly naked trading just paying attention to price action and comparing all timeframe charts... But I was wondering what indicator would you guys highly suggest I implement in my trading? I read that a lot use RSI or Stochastic... any way for me to use them efficiently (or other ones) ?

What kind of methods do you guys use to trade by the way? Or any particular trading system on this forum that you'd highly recommend I look into?
Lose all the indicators as soon as you can and concentrate on horizontal support and resistance with trend analysis.
  • #15
  • Nov 15, 2011 12:07pm Nov 15, 2011 12:07pm
Quoting Blaiserboy
Perhaps you want to start to draw trend lines frequently as they will help you to know direction as well as support and resistance.

Good trends are available for less than 20 percent of the time, but you can find small trends by going to smaller time frames.

The moving averages will get further apart as the trend increases and they will move together as the trend lessens...

Perhaps you want to use three charts ie 60 min and 15 min and 5 min with the same indicators on each.... that will illustrate the cycles within cycles and help you to know...
Very good advice.
  • #16
  • Nov 15, 2011 2:07pm Nov 15, 2011 2:07pm
Quoting jag1966
Lose all the indicators as soon as you can and concentrate on horizontal support and resistance with trend analysis.
Perhaps you would post your work chart showing how you set up for S & R.

(Only because S & R is just about the most important aspect.)
  • #17
  • Nov 15, 2011 2:14pm Nov 15, 2011 2:14pm
Quoting Zerix
... But I was wondering what indicator would you guys highly suggest I implement in my trading?

It is not the indicator you use, rather, how you use the indicator.

Any indicator will do. Just make sure that it provides you with good information about the probability for either Swing and/or Magnitude (momentum).

Then draw a horizontal line on the chart at the point at which your "indicator" tells you that there is a high probability Swing imminent and/or that there is a high probability for continued magnitude (momentum) - then defend that line.

See http://www.forexfactory.com/showthread.php?t=321847 for more information.

We don't need more indicators. We need more insight as traders. Insight into what's already there - what's directly under our nose.
Y = MX + B. The most important price level of all.
  • #18
  • Nov 15, 2011 2:23pm Nov 15, 2011 2:23pm
Be sure to check into the posts of Line in the Sand.... some great posts in that thread

Start at post # 1


http://www.forexfactory.com/showthre...56#post5067156
  • #19
  • Nov 15, 2011 3:03pm Nov 15, 2011 3:03pm
Here is a primer on Trend Line drawing, not necessarily the complete story on trend lines but enough to get a person started.

And an article on Support and Resistance.
Attached File(s)
File Type: pdf Trendfans and Trendline.pdf   497 KB | 3,933 downloads
File Type: pdf Support and Resistance.pdf   299 KB | 671 downloads
  • #20
  • Nov 15, 2011 10:42pm Nov 15, 2011 10:42pm
i just use SMA 200 and some S&R levels, generally people use SMA 200 to look at the main trend
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