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Trading with and without Indicators

  • #1
  • First Post: Apr 2, 2013 5:11am Apr 2, 2013 5:11am
Hello Everyone,


Would like to know your experience and thoughts about trading with and without indicators. 03 Years ago my MT4 filled with more than 05 + indicators . I change indicators and add new ones everyday. I don't know the exact figure but I have tested more than 500+ indicators. Unfortunately nothing worked well for me. Finally down to simple moving averages and currently using MAs with price action as my strategy.

Hope you guys have similar stories to share .
  • #2
  • Apr 2, 2013 5:13am Apr 2, 2013 5:13am
If you are currently using any indicator and had success with it, don't forget to share here.
  • #3
  • Apr 4, 2013 10:09am Apr 4, 2013 10:09am
Even I like learn technical indicators but I do not use them in my trading, I better use Elliott wave to determine my trading position.


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momentum trading
  • #4
  • Apr 5, 2013 5:49am Apr 5, 2013 5:49am
In my experience, if entry and exit is just based on indicator, it won't work.

Why?
The problem is RR ratio. If you do scalping, of course high risk to reward. If you do normal trading, you set RR at least 1:1, still the market will trigger SL frequently. In order to avoid frequently triggering SL , raise your time frame to daily or weekly, it work better.

Indicator would not give 100% correct signal. I have tested many scenarios, I know what is the limit of indicator. The best indicator among the rest of indicator would be trend, price action SR, and Elliot wave.

So the High probability setup would be using multiple time frame trading. The other technique would be control the RR by using MM because market probability is unable to be controlled, in order to get positive expectancy.

There has almost zero risk setup if you could understand properly the indicators and MM. Frankly speaking, you cannot tweak indicators into useful function, so focus on MM. Sorry I can't tell more of this .....
  • #5
  • Apr 7, 2013 1:06am Apr 7, 2013 1:06am
The best indicators are your eyes.

A naked chart ... look at the price action around high TFs key levels.

Check at some 60minuteman's great threads about price action ... Great great readings.
MT4/MT5 EAs/Indicators/Alerts coder
  • #6
  • Apr 7, 2013 1:21am Apr 7, 2013 1:21am
In my experience, the cleaner your chart, the better. Too many indicators clouds your judgement.
Trade what you see, not what you think!
  • #7
  • Apr 7, 2013 1:53am Apr 7, 2013 1:53am
Quoting OMGtrader
In my experience, the cleaner your chart, the better.
Agree 100%.

Quoting OMGtrader
Too many indicators clouds your judgement.
In fact, the number of indicators doesn't cloud your judgement ... it simply gives you wrong judgement because almost all indicators are lagging.
MT4/MT5 EAs/Indicators/Alerts coder
  • #8
  • Apr 7, 2013 4:39am Apr 7, 2013 4:39am
Its a typical learning cycle of starting out with indicators and then moving onto cleaner charts over time. I don't think there is anything wrong with using indicators as long as you understand their limitations.

Too often I see traders, even so called 'professional traders/educators', posting after the fact charts. These will typically show where they would have got into the market forgetting that its actually the next candle after the indicators has signalled where you would have made entry. More often than not most of the move has already happened and you would have got in late often stopping out for a loss. This is not an edge.

One could argue price action is an indicator (eg. candlestick analysis which some would argue is not price action...), as it shows the reaction of decisions that have already happened.

If you have to use indis, you need to consider the below in your trading plan:

There are two types of indis - lagging and forward acting.

Lagging indicators can be used to confirm trends etc on higher time frames then trade with forward acting indicators such as bollinger bands and fibs on the lower time frames for entry. The lagging indis still mean you will have a period of bad trades towards the end and start of trends as the lagging indi attempts catch-up from when the price actually reversed.

You can reduce this period of losing/uncertainty during this lagging gap by plotting support/resistance or supply and demand levels on higher time frames to judge when reversals might actually occur and then staying out until your lagging indi confirms the trend.
  • #9
  • Apr 8, 2013 8:42am Apr 8, 2013 8:42am
Quoting FerruFx
The best indicators are your eyes. A naked chart ... look at the price action around high TFs key levels. Check at some 60minuteman's great threads about price action ... Great great readings.
i do say BIG YES - no need for indicators.......
GUYS BE AWARE FROM HUNTING YOUR STOP LOSSES BY YOUR BROKER & BY "GHOSTS"
  • #10
  • Apr 8, 2013 10:23am Apr 8, 2013 10:23am
I agree that the lagging limitation of indicators can make them misleading. However, I have had success using indicators on longer timeframes to get a better idea of the trend before moving down to lower timeframes to trade. I use mostly ema's with an rsi and sometimes the ATR.
  • #11
  • Apr 8, 2013 12:11pm Apr 8, 2013 12:11pm
Its about having the right balance for you, too many indicators will put you in the back of the pack and trying to go 100% clean will make it very intuition/guessing making it hard to give you a good edge.
Just have to find what works for you and develop your own style!!!!
All posts are my personal opinion
  • #12
  • Apr 8, 2013 1:51pm Apr 8, 2013 1:51pm
Quoting Rtm
Its about having the right balance for you, too many indicators will put you in the back of the pack and trying to go 100% clean will make it very intuition/guessing making it hard to give you a good edge. Just have to find what works for you and develop your own style!!!!
Not true at all. When you have no indicators you look for price action and order balance - hardly "intuition and guessing".
  • #13
  • Apr 8, 2013 2:14pm Apr 8, 2013 2:14pm
Order balance?? Price action in forex can only be defined as support and resistance levels and candlestick patterns.
When you have indicators that doesnt mean you cant look at PA also? indicators are meant to used as a confirmation of PA. Thats all Im trying to say. Dont hate on those who are making real money.
All posts are my personal opinion
  • #14
  • Apr 8, 2013 2:30pm Apr 8, 2013 2:30pm
Quoting Rtm
Order balance?? Price action in forex can only be defined as support and resistance levels and candlestick patterns. When you have indicators that doesnt mean you cant look at PA also? indicators are meant to used as a confirmation of PA. Thats all Im trying to say. Dont hate on those who are making real money.
Too narrow of a view, friend. Price action is a very wide field of study and requires not a single indicator. Saying it is composed of "support and resistance levels and candlestick patterns" is like saying indicators can only be defined as lines. Order balance in the way I discuss it deals with supply and demand zones, which are outlined in Kenneth Lee's thread. We look for areas on the chart where buying and selling was at an equilibrium and then a destabilization happened, indicating imbalance.

My personal gripe against indicators is the age old argument that they lag....by the time many see an entry on an indicator, I'm already in position and up 20 pips, while the indicator trader has to add that to their risk at the expense of profit.
  • #15
  • Apr 8, 2013 2:35pm Apr 8, 2013 2:35pm
hi, sorry for random post, but ive been following these boards for quite long, though not contributing, and therefore as a junio member i cannot open a new thread, so im posting here randomly.

basically im doing a spring week in S&T in a bulge bracket investment bank this week (in UK, first year programmes) and will rotating through desks tomorrow.. while i have keen interest in FX Option and Spot trading, and will surely stand my ground, does anyone have any smarty questions for me to ask the traders/salespeople/quants, to both for you get answers from institutional traders and for me to benefit as well?
  • #16
  • Apr 8, 2013 2:40pm Apr 8, 2013 2:40pm
Trading without indicator? is not my way..
IMHO...indicator is still needed

If you go to Forums and then Tradiing Strategy, you'll have a chance to look at thousands of strategies
Pick one for you...

I bet...if the strategy is involving a discretionary act (human judgement) you will experience a trouble in determining the Entry
Why? because any Discretionary act from one person to another, may vary... it may based on perception, opinion, experience,etc.

Indicator helps us to determine the exact Entry

For me personally not only the Entry, it's incluide managing the trade (how long i wanna keep my position, signal of price when it's momentum fading out) and finally...Exit
i worshipped... Momentum
  • #17
  • Apr 8, 2013 2:45pm Apr 8, 2013 2:45pm
Quoting rockrobb
Trading without indicator? is not my way.. IMHO...indicator is still needed If you go to Forums and then Tradiing Strategy, you'll have a chance to look at thousands of strategies Pick one for you... I bet...if the strategy is involving a discretionary act (human judgement) you will experience a trouble in determining the Entry Why? because any Discretionary act from one person to another, may vary... it may based on perception, opinion, experience,etc. Indicator helps us to determine the exact Entry For me personally not only the Entry, it's incluide...
Find me one truly mechanical strategy that works well over the long haul (several years) and doesn't have some fundamental flaw, like trend-following or martingrail. People use indicators because the real truth is they don't know what they're doing and they want a nanny to tell them what to do. The result is high risk low reward trades that end up losing the trader money but they don't mind because they still get short term highs from winning streaks that they can post on the forum. From the years of intense study I've done now I am certain that money does not come that easily. Trading is a game of odds and deception, and the human mind is best equipped to play it.
  • #18
  • Apr 8, 2013 2:47pm Apr 8, 2013 2:47pm
Well there are others things in there as well like psych numbers, swing points, consolidation, wind up, congestion etc. But what you just said is that exact same thing, supply and demand is support and resistance. The only reason it works is because it is pattern recall, as in it has happened before and say 6 times out of 10 it did a certain thing and so when it happens again you have the 60% chance that price will do that same thing again. EG price makes a double top and retraces back down x amount of pips. However this is barely a good edge at all, the good PA trader puts all the things together like a triple top, 00 round number, candlestick pattern and price confirmation and probably more to get any edge at all worthy.

Lag can be good because on one side it may get you in late however on the other side you will smooth out more 'noise'. I would much rather add 20 pips risk at the expense of lag then miss out on a potential 100 pips because of noise in the market causing me to cut the trade out early. Trading is simple, you dont have to be a genius to do it.
All posts are my personal opinion
  • #19
  • Apr 8, 2013 3:01pm Apr 8, 2013 3:01pm
Very interesting discussion. Each must develop a style which suits him. Personally, I use DeMark trend lines and Fib levels, and a moving ave for exits. Are these indicators, or do you only consider the squiggly lines on the bottom as indicators?
  • #20
  • Apr 8, 2013 3:15pm Apr 8, 2013 3:15pm
Quoting Rtm
Well there are others things in there as well like psych numbers, swing points, consolidation, wind up, congestion etc. But what you just said is that exact same thing, supply and demand is support and resistance. The only reason it works is because it is pattern recall, as in it has happened before and say 6 times out of 10 it did a certain thing and so when it happens again you have the 60% chance that price will do that same thing again. EG price makes a double top and retraces back down x amount of pips. However this is barely a good edge...
A common misconception but supply and demand is not the same thing as support and resistance. It is, however, the cause of what many later see as support and resistance lines. If one were to draw areas of support and resistance on a chart and then draw supply and demand zones, they would not be the same. In the end, yes it is a pattern we are looking for, but the rationale is different from most other TA methods. That is, that there are orders left in an area where we notice institutional level buying and selling going on, and that when price returns to that area, there is likely to be an imbalance of orders to resume that buying or selling.

Round numbers have some predictive value as well, but candlestick patterns themselves lag as well, as by the time you see it buying or selling has already happened. Confirmation is something I don't practice as in my view you end up increasing your risk for the sake of it, with little value in return. A much touted "confirmation" is the pinbar - which I've also studied in the past. My conclusion was that pinbars are almost worthless in and of themselves, and that it matters *where* the pinbar forms. But by the time you see the confirmation it just isn't worth it and you may as well have taken the zone straight up, as even with "confirmation" they still can and do fail frequently before price reverses and moves away from a price zone.
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