Re: [Technical-Investor] Indicators.

Hello Boss, (Mr.Chockalingam) BIG words. VERY BIG words. When people with little knowledge want to show off their unparallel (?) intelligence, your appreciation to a tiny tot like me makes me nervous.  I am a toddler in this technical analysis world. I bow my head to your "zero ego". ========= Well, coming to the indicators, I have some views. Everyone, over a period, develop almost an affinity with certain indicators which were very faithful to him and became one's favorites. When the market opens, we will not know, whether it is going to be a trending or range bound market and we do not have the luxury of selecting specific indicators for specific markets. But by the behavior of our favorite indicators, which we always have on our charts, we will be cautioned by the type of Market and accordingly react. The original idea was to have the views/personal findings, experiences of forum members about the nuances, tips and tricks about the indicators they are familiar with. For example BB is known as ranging mkt indicator. But when the price bar hits the upper band and the MACD crosses '0' line from below, there is going to be a nice run upwards for some time. Once it is completed, if you remove the BB from the chart and show it to somebody he would say that that particular period of run in the chart was trending. For those who use BB and MACD, if the two bands move horizontally and the MACD, signal line also moves flat near 0 line, they will understand it is a ranging market. Parabolic SAR is very nice to look at when plotted in a chart. Nothing is more dangerous than depending on it solely for SL purpose. Something like considering alternative dots, or in combination with other indicators like MACD will save from disaster. So my point is instead of selecting the tools according to the Market (which we do not know beforehand) whether it would be possible for us to know the type of market with the indicator we are familiar with. If so, what indicator would behave how during trending and range bound market. Hope we will receive some useful information on this subject. Best regards. Jk.   --- On Fri, 11/20/09, chockkalingam n <chockkalingamn@yahoo.co.in> wrote: From: chockkalingam n <chockkalingamn@yahoo.co.in> Subject: Re: [Technical-Investor] Indicators. To: Technical-Investor@yahoogroups.com Date: Friday, November 20, 2009, 5:04 PM Dear JK You are the hero and I am just a supporting actor. Ever since you became active in this group I have learnt a lot of tradeable ideas from your messages. Please keep going Chockalingam --- On Fri, 20/11/09, Jayakrishnan <jayakrish2001@yahoo.com> wrote: From: Jayakrishnan <jayakrish2001@yahoo.com> Subject: [Technical-Investor] Indicators. To: Technical-Investor@yahoogroups.com Date: Friday, 20 November, 2009, 10:00 AM ======  Thanks for the views expressed by Mr. Chockalingam and Mr. Vin. Very much note worthy. ====== Indicators (or Back to basics). The best technical indicators are firstly trend lines/support/resistance/volume. After that would come the versatility of the MACD. It can be left on the chart at all times. Use only buy signals in the uptrend and sell signals in the downtrend. Use both signals in a range. In Trends use 2-3 of the following maximum: 1. Trend lines 2. Moving Averages 3. MACD (buys in uptrend or sells in downtrend) 4. ADX (above 30) 5. PSAR (for stops in strong trends) OR 6. ATR levels for stops In Ranges, use 2-3 of the following maximum: 1. Support/Resistance 2. MACD – both buy and sell signals 3. Bollinger Bands 4. RSI 5. Slow Stochastics 6. ADX below 30 7. ATR levels for stops   MACD BB Slow stochastics Source: http://www.istockanalyst.com/help/MainIndicator.aspx Best regards, Jayakrishnan. I am just reproducing what I have understood from earlier posts of people like Prashant, GV, Etc. Oscillators work well when the up or down move has matured and about to reverse . Trend strength  is to be confirmed by ADX etc. MAs do not work well and whipsaw a lot at this phase of market. On the other hand, when there is a clear trend,  oscillators may remain oversold/overbought for extended periods of time and taking any contra trade will be dangerous unless there is clear confirmation of trend reversal from other methods. During such periods dip in oscillaltor value can be used as buying opportunity if the market trend is up and vice versa. Oscillators are likely to work well in intraday trading, as moves are very rarely one sided during the day. Whatever said above applies to intraday trading also. But, with judicial use of MAs/MACD alongwith oscillators one  can always identify profitable trades Chockalingam   From: vin st <vinst1@yahoo. com> Subject: Re: [Technical-Investor ] The indicator that foreseen the sudden upsurge To: Technical-Investor@ yahoogroups. com Date: Thursday, November 19, 2009, 3:59 PM   Whatever be the name, each oscillator has very similar failings. UO also fails often and at that time, some other may give forewarning. vin The INTERNET now has a personality. YOURS! See your Yahoo! Homepage.