It seems to suggest that indicators are fairly useless (are they?) and that the simpler methods are the better ones… I’m really just trying to find my feet at the moment and finding so much conflicting information really isn’t helping! At the moment, I’m just looking for a solid trend, checking that RSI and stochastic levels support the idea of the trade continuing, and then using fib and support levels to find an entry point. Does this seem like a viable strategy to you, or should I try out the one in the link instead? Alternatively, do you have any other suggestions?
Anyone who makes broad statements is useless. Indicators are not usless, some of the things they’re used for are useless. Anyway you want a simple trend system, try this. I thought the one I started with was simple, this is much better in my opinion. I tried it and it worked for me. I trade mostly smaller time frames so for me it wasn’t any good. It’s more of a day trading/swing trading trend following system and works off the hour TF. But it doesn’t get much simpler. If you decide to give it a try, cause you’re new, I would add a stochastic.
Just a few things, mainly adding to gp0053’s and Daydreamer’s sound posts –
Indicators are fairly useless for most traders because most traders have no idea what the indicators are indicating. They do not know how they are derived and therefore do not know just what they are telling them (candlesticks, for example, are just as much lagging price action indicators as RSI, moving averages and stochastics).
You mentioned using both RSI and stochastics… were you aware they are both momentum oscillators? Though there are certainly differences between the two you are applying two indicators that are intended to show somewhat similar things, momentum and price extremes, and are somewhat duplicative. Replacing one of these with an indicator from a different category or family of indicators may prove to be beneficial – unless you have found something unique to capitalize on in using two oscillators then, by all means, continue.
Daydreamer’s suggestion of finding a system and sticking to it was good. You can trade candlestick patterns, s/r levels, indicators, volume and an almost infinite number of combinations of these – successfully, I might add. You just need to learn the nuts and bolts of whatever system you choose so you know what those candlesticks, squiggly lines or bars on your chart are telling you about where price is likely to go with the statistics to back it up.
There is no limit of indicators and that is the problem with them. You will see so many indicators! But if u follow PA, u do not need to run after so many indicators. That is the benefit. People also sell indicators, that is another problem. If u like PA, welcome to the thread I regularly follow:
