Do the indicators trick us into making the wrong decision? | Page 2 | Forex Factory

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Do the indicators trick us into making the wrong decision?

  • #21
  • Feb 12, 2012 7:40pm Feb 12, 2012 7:40pm
Quoting Custos
well, basically I approach the markets from a very scientific way. I don't give a crap about psychology, discretion or whatever.

Normally I program my trading ideas and get myself a log of +10.000 trades. Then I analyse that bunch. If the system produced consistently profits over the long-term, I then test it on +100.000 trades. If it still produces profits over the long-term, I look how I can use it in my portfolio.
Lets see how 100,000 hours plays. There are about 6200 trading hours per year. Considering that about 1/3 of them are worth trading and/or working hours (must sleep), you might find 2000 hours per year. I realize there are multiple pairs available, but realistically most of the dollar/ European pairs are highly correlated. So you might find 2 pairs on average that are worth trading simultaneously. That's 4000 hours of trading opportunity per year and assuming an average of 1 trade per hour, you need 25 years of historical data. You may impress the rookie traders but some of us have been around and know better.
  • #22
  • Feb 13, 2012 12:06am Feb 13, 2012 12:06am
Quoting CodeMeister
Lets see how 100,000 hours plays. There are about 6200 trading hours per year. Considering that about 1/3 of them are worth trading and/or working hours (must sleep), you might find 2000 hours per year. I realize there are multiple pairs available, but realistically most of the dollar/ European pairs are highly correlated. So you might find 2 pairs on average that are worth trading simultaneously. That's 4000 hours of trading opportunity per year and assuming an average of 1 trade per hour, you need 25 years of historical data. You may impress the...
Who said that I only trade currrency pairs? Not sure how you got from me talking about trades to you talking about hours. Sometimes people read what they wanna read, right?

When I say I backtest it on + 100.000 trades, then I am using around 50 to 100 instruments (not only currency pairs) and some of them have decades worth of data. Mr. CodeMeister, before getting offensive, you should maybe make less assumptions and just ask how I can achieve my claims.
  • #23
  • Feb 13, 2012 1:41am Feb 13, 2012 1:41am
So, then what, go PA with an indicator or two to read?
  • #24
  • Feb 13, 2012 2:44am Feb 13, 2012 2:44am
Indicators should work if you understand them, I guess. Yes, they lag but it doesn't mean they're useless. Maybe try finding an indicator that you understand and like could make it just a lil more profitable.
  • #25
  • Last Post: Feb 18, 2012 12:31pm Feb 18, 2012 12:31pm
Indicators are not evil. People who say indicators are useless and evil don’t know what they’re talking about.

As soon as you don’t mention trading indicators are accepted everywhere from electronics to motors and planes use indicators. It’s how you use them in conjunction with price action it helps the naked eye see price action better using just couple and not for buy/sell signals that’s your own discretion with your own disciplined rules.
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