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How much of TRADING is really about the indicators?...


jacquesnz

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I have read in various publications that trading (at least making a success of it) is more about money management and the mental part of trading, rather than which indicator you use or which system you follow.

 

I would like to know your thoughts on this? Are these guys then saying that one can pretty much make a success of this with ANY indicator...as long as you THINK / BELIEVE you will be successful at it?

 

Heck - to me this is a little silly...ignorant almost. As first have the indicator working well in back testing and THEN make it work....at least THEN let it make you money. What do you think?

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Re: How much of TRADING is really about the indicators?...

 

For me, indicators can be the first signal, but we still need to confirm it with another indicator or using Price Action.

 

NEVER believe 100% in indicator, only use it as an opening signal.

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Re: How much of TRADING is really about the indicators?...

 

None of them are perfect and also, you can trade without any indicators.

The most important thing is you. How you do with self-discipline and money management.

Just believe in yourself and own eyes.

If I want say furthermore, stick with one or two system. Do not make yourself confuse and no more wishing hoping.

:)>-

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Re: How much of TRADING is really about the indicators?...

 

Indicators help to built a confidence in yourself and in your trading strategies. Does not exist the "holy gray" indicator (al least I've never found out), good in every situation, but it exists some good tools that help you to survive.

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Re: How much of TRADING is really about the indicators?...

 

Indicators showoff nothing but market behavior at certain points.

However market beavior is also driven by economic factors, which will influence you're day trading more than you might expect.

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Re: How much of TRADING is really about the indicators?...

 

I read something interesting by Van Tharp. Him and Tom Basso did a study where they basically flipped a coin to determine buy or sell. They did this I think over a few hundred trials and with the proper position sizing were able to make it profitable. So if money management can make a 50/50 system profitable, then imagine a system with a positive expectancy. That's why they say that position size is far more important than any indicator. Just use an entry that makes sense, be consistant, and use proper position size. Of course, we always love to look for the Holy Grail (when in fact it's money management).

 

Peter

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Re: How much of TRADING is really about the indicators?...

 

Could not have said it better myself. I guess the "inner mind factor" that people talk

about is controlling our natural human urges (greed, fear) and stick to a machine-like

impartial operation. Add money management and you have a winner.

 

Here's a link to add to the discussion:

 

http://www.trading-naked.com/

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Re: How much of TRADING is really about the indicators?...

 

Think of indicators as a visual aid to present price action in easier to decipher visual manner - however, that comes with a problem of lag - so best is to combine price action/patterns with a select few indicators chosen for your trading style

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Re: How much of TRADING is really about the indicators?...

 

It's curious, I noticed in all the videos I saw from real traders all the charts I saw was only candlesticks, no indicators at all. I am talking about those guys who trade on trading rooms or offices with other people on their company, each with 3 - 6 screens and all that stuff, so it's pretty sure they trade for a living and they know what they are doing.

 

With good money managment you could make tons of money with an average strategy, but that doesn't mean mm is easy.

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Re: How much of TRADING is really about the indicators?...

 

For manual trading,

the point is that you have to find correct long and short patterns familiar to you...

I know quite a few people made their millions by just using simple indicators like moving averages or stochastics indicators...

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Re: How much of TRADING is really about the indicators?...

 

Something I would highly recommend is not just to use a bunch of indicators and look the lines/colors, learn about the indicator you are going to use, learn how it works, the history, then it would be much easier to use it and more important you will understand much better the indicator's reading.

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Re: How much of TRADING is really about the indicators?...

 

Indicators are just lagging, I believe its just for someone to confirm what the past has done to make a decision for the present conditions. When I started out, I had too many different indicators on different charts trying to confirm one another, it did not help, its just made me much more confused whether to take the trade or not.

 

Even if you just use price action alone, keep it simple; I see some charts with all these lines drawn all over the place which would make one stay away from such techniques. The only thing one needs to plot is S&R and trend lines, and know the market direction on the higher timeframes. I believe that should be enough to get you started. If you look at it, most indicators give the same information but in a different view.

 

If you must use indicators, keep it down to no more than two or three, anything beyond that is too much clutter. The fancy indicators or colors does not make for a better trader. I also think that some put too much analysis to determine where price will go; it's something I do not do - each have ones own style of trading. Use the KISS Method.........

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Re: How much of TRADING is really about the indicators?...

 

Some of you may be tempted to add more indicators or requirements to the system. Avoid that impulse. Adding too many indicators to a system actually weakens the effectiveness of the system because the indicators end up fighting with each other. This is called “indicator piling,” and it is a trap many fall into

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Re: How much of TRADING is really about the indicators?...

 

two MACD (one for shorter action , one for longer action)

two or three MA (anytype that you feel good with it)

trend direction in higher TF

ok, just it.

simple/good trading system that you can use in any TF and earn pips !

for example in 30 TF , with these simple indicators , you can eran 30 pips from each pairs daily , monitor 4 pairs and 100~120 pips daily .

 

DO you know if you can get 100 pips daily you will be rich man in less than 3 years !!!

:)>-

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