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Trading with Technical indicators

  • #1
  • First Post: Aug 9, 2015 9:15am Aug 9, 2015 9:15am
The objective of this thread is how to trade with technical data. When we talk about technical data, that means, it is purely based on statistical analysis. Therefore, it is important to know statistical data is only an indication of past, and there is no reason why to repeat the same. We only can predict similar pattern of data “may occur” in future. Thus please be aware, technical indicators may only give you a certain idea about the market behaviour.
We have come across many times, technical indicators have failed the predictions especially in high volatility periods.
BUT,
We use technical indicators for our trading, because it is the ONLY analysis can be found to predict the FOREX market.
Most popular technical indicators we have come across are :

  1. RSI ( Relative Strength Index )
  2. Stochastic
  3. MACD ( Moving Average Convergence and Divergence )
  4. Moving averages ( Exponential and simple moving averages )
  5. Parabolic SAR ( Stop and Reversal )
  6. ATR ( Average True Range )


Correct use of these indicators will give you better winning opportunity most of the time. On the other hand daily pivot points also give an idea about the direction of movement along with these indicators. I will discuss how to use those indicators time to time for better results.

Cham
  • #2
  • Aug 9, 2015 5:43pm Aug 9, 2015 5:43pm
Quoting Cham
The objective of this thread is how to trade with technical data. When we talk about technical data, that means, it is purely based on statistical analysis. Therefore, it is important to know statistical data is only an indication of past, and there is no reason why to repeat the same. We only can predict similar pattern of data may occur in future. Thus please be aware, technical indicators may only give you a certain idea about the market behaviour. We have come across many times, technical indicators have failed the predictions especially in...
If most of the time failed, why use it?
Is it true that ONLY word?
In my opinion all of that indicator is not the core principle to win in this field.
we don't predict, we only ride
  • #3
  • Edited 6:24pm Aug 9, 2015 6:12pm | Edited 6:24pm
The best indicator is actually Japanese candle sticks... And not just reversal patterns.. It shows you the whole structure of the market. Its really amazing.. You can see where people most likely have stops.. you can see where price jumped up and trapped people on the wrong side... You can see the final spike up that turns into a shooting star. you can see support resistance with Japanese candle sticks. They are everything! If your new and unprofitable, I'd start with this. Once you master reading naked charts with only candlesticks.. you may find a moving average or an indicator adds to your base knowledge of reading a chart. But with out this base knowledge, I don't think indicators alone are of any use and should be avoided by new people as they distract them from figuring out the clues the chart is giving. If your driving a car the chart is like the road, Indicators are like your speedometer, temp guage, and gas guage. trying to get to your destination with only looking at your speedometer and other gauges is crazy. 99% of the time when driving look at the road!
The only system that will work is one designed by and for yourself.
  • #4
  • Aug 9, 2015 6:15pm Aug 9, 2015 6:15pm
Technical signals are coincidental. Trade technicals for a long time and you'll realize the fundamentals always prevail. Why do you need a myriad of oscillators and wave counts to tell you price action is exhausted or going up. Basic support and resistance is about all one needs everything else is a crutch.
Even candlesticks between two different broker feeds, same time frame, will be different.
  • #5
  • Aug 9, 2015 10:54pm Aug 9, 2015 10:54pm
Hey Guys, Japanese Candle stick patterns is the main tool for chart analysis. But only with candle sticks you cannot decide to start a trade. That is where technical indicators coming to action. What I clearly want to mentioned was, you cannot rely only on technical indicators. In order to start a trade, you have to consider Fundamentals analysis, technical analysis as well as the sentiment analysis. If you blindly follow the technical indicators, you will be ended up with guaranteed losses.

Why do we do forex trading ? to make losses ? Certainly to make profits at the end of the day.

Continuous profits is not a joke. This is why you have to consider all above analysis.

Of course technical indicators help you to make your journey success. In my opinion, RSI, MACD, Stochastic, EMA and Parabolic SAR help many ways to develop profitable trades many time. I use those indicators in all of my trades where I get continuous profits . If you are a day trader, then most advisable to consider daily pivot points as well.
But it is your call, you will be the winner or looser at the end of the day.
Cham
  • #6
  • Aug 9, 2015 11:37pm Aug 9, 2015 11:37pm
How do we use these indicators ?
First of all, Do not follow me. You can get an idea of my trading strategies and develop your own style. I am not liable for any financial losses you will make by following my strategies.
First let's consider RSI,
for day trading I use RSI(10) period as HL/2 in MT4 but it can be used for week trading as well.
Next EMA(5) and EMA(10) in my main chart.
MACD as (5,9,4) i.e. fast EMA 5, Slow EMA 9 and MACD SMA 4.
Then Parabolic SAR ( 0.02, 0.2 ) i.e. step 0.02, maximum 0.2.
Stochastic (14,3,3) with MA method : Exponential
Trade start with EMA and RSI and considering stochastic which is in oversold or over bought areas.
When RSI is within in range of 30 - 70, buy or sell trade is being decided.
Parabolic SAR is used to know the early reversals. ​
Cham
  • #7
  • Aug 10, 2015 1:02am Aug 10, 2015 1:02am
Quoting Cham
How do we use these indicators ? First of all, Do not follow me. You can get an idea of my trading strategies and develop your own style. I am not liable for any financial losses you will make by following my strategies. First let's consider RSI, for day trading I use RSI(10) period as HL/2 in MT4 but it can be used for week trading as well. Next EMA(5) and EMA(10) in my main chart. MACD as (5,9,4) i.e. fast EMA 5, Slow EMA 9 and MACD SMA 4. Then Parabolic SAR ( 0.02, 0.2 ) i.e. step 0.02, maximum 0.2. Stochastic (14,3,3) with MA method : Exponential...

So you just open a trade when all recommended parameters of those indicators coincide?
Interesting, but too simple for market I guess.
  • #8
  • Last Post: Aug 10, 2015 8:31am Aug 10, 2015 8:31am
Quoting leebsurag
{quote} So you just open a trade when all recommended parameters of those indicators coincide? Interesting, but too simple for market I guess.
</p>I use these indicators to setup my trades. But I did not mentioned I am waiting for all indicators give me green light. Finally, this is my eay of trading. I just wanted share my strategies with others. I do not fail with these indicators at any moment. Good luck for your trading...
Cham
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