hey ive been demo trading for a little while and im abit confused as to how you would determine what setting to use for each indicator (rsi, stochastic, macd) and just after a bit of advice to help me along the way, thanks in advance.
Personally I wouldn’t use any of them
I also don’t use them … but from my “indicator years”, I found MACD more interesting and potentially helpful than the RSI, and that in turn more helpful than stochastics.
It’s a really tough question to answer briefly (though I can well appreciate how and why it arises) because all these things depend on what sort of trading you’re doing, and the [I]details[/I] of exactly what you want to use them for.
I’ve made some general observations about using the MACD in this post, which might help/interest you.
And welcome to the forum, James.
Sometime I am hear some trader suitable and comfortable using bolinger band, some another felt suitable using RSI and might another like using stochastic, I think each trader having different experince during choosing good indicator for trading purposes, I am also ever read certain trader they can making profit only with naked chart analysis
Don’t change the setting of indicators, if you are new, when you practice with indicators use the default settings, they are the best ones to trade with.
Well to know what setting to use you first have to know what you want the indicator to tell you. Then you can change the settings untill you get what you want. RSI sucks IMO. Stoch is not far behind. MACD is not bad but you have to know what the indicator is telling you and why. Basically say your pair is in an uptrend and you are looking to buy pull backs with stoch. You will see the you are going to get a lot of false signals. By changing the settings are can slow down the indicator to filter out a lot of the false signals but also keep in mind that by doing so you are going to also have fewer signals at all. This video is a good place to learn about indicators and what they do he also goes a little into settings and all that.
All indicators are function of price, hence all indicators lag price action.
Trading with Indicators will provide you with entry and exit signals that are “late” relative to price actions, hence late entries and late exits.
My advice would be to learn to trade the price action itself by looking for reversals and continuations with Support and Resistance zones or Fibonacci Retracements and Extensions.
Cheers,
You do realize so does price action. Support and resistance is what? BASED OFF PAST PRICE MOVMENTS. So it also lags price. An over bought stoch does what suggests price is overbought and may be pushing down. Hmmmm what is a resistance area or a fib retracement? They suggest the exact same thing but none are for sure that price will react as it is supposed to. So if you want to trade truly price action with no indicators try trading the flashing red and green quote screen as that is not based on past price but the actual price.