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Indicators, a waste of time?


Discussion in Psychology and Money Management

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  #41 (permalink)
 
kcrawford's Avatar
 kcrawford 
Honolulu, HI/USA
 
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Joseph Connors View Post
The large orders that you do not see are masking the true supply/demand picture. If you knew of large volume transactions occurring at certain levels
would it not affect your decision making process? With the Dark Pools we are not getting a true picture of the supply/demand situation in the market
which is what drives price in the first place!


I can see absorption in the footprint, and follow the market orders with cumulative delta...or I can worry about what I can't see.

So what indicators do you use to solve your Dark Pools issue?

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  #42 (permalink)
 sevensa 
Singapore, Singapore
 
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kcrawford View Post
Its not that strong...would you rather your guess based on market transactions? or squiggly lines. Feel free to try to argue about nothing, I won't participate. This is also a futures forum, not options...nobody cares.

Lastly, I don't have a 100% win rate....but only lose maybe 2 days a month. So I think I'm doing ok.

Perhaps take a deep breath and recognize that there are other methods, ideas and interests beyond just your own and unless appointed, you only speak for yourself.

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  #43 (permalink)
 TradeWithTrend 
El Paso, TX
 
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What would be one or more easy-to-learn resources about order flow Supply and Demand levels? I use NinjaTrader platform. Thanks.

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  #44 (permalink)
 
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 kcrawford 
Honolulu, HI/USA
 
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sevensa View Post
Perhaps take a deep breath and recognize that there are other methods, ideas and interests beyond just your own and unless appointed, you only speak for yourself.

Do you feel better now?
1) I never said I spoke for anyone but myself...
2) I never said my way was the only way...
3) you imagine an awful lot going on here that isn't going on...
4) the thread asked for my opinion, I gave it...you don't seem to like it...get over it.
5) nobody asked you to moderate.

but again, feel free to continue your imaginary argument if it makes you feel better.

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  #45 (permalink)
 Rainmakersg   is a Vendor
 
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mickymelz View Post
Regards to automation tools I don’t think I’ve ever really use them, I definitely believe that automation and Algo does have its advantages. I think moving forward may be trading manually, but also using Algo trading could set you apart. But if everyone is using automation to trade then wouldn’t the manual trader have an advantage? I’d definitely would love to get more insight on Algo.

Since you scalp off the DOM. I will give a simple example.

For most people who scalp off the DOM, they set a fixed number of ticks as stop loss. We have to ask ourselves if this makes sense, because the real support/resistance may be much less or more than these number of ticks away. (Of course for people who scalp off the DOM, it's hard to see the support and resistance unless they zoom out from a chart). Say if you long and the real support is 15 ticks away, but you place a hard fixed stop loss at 10 ticks, would that be a smart thing to do? Conversely, if you place your stop much farther out than 15 ticks, then your profit target needs to be much wider, and the price may not go there in reality.

Now say you wish to implement a dynamic stop loss. Then the position size has to be automatically adjusted so as to keep your risk per trade consistent. E.g. for the first trade, the stop loss is 10 ticks, and your contract size is 1 contract. If for the next trade, the stop loss is 5 ticks, then your contract size should double to 2 contracts. If the contracts are not scaled accordingly, then you may be losing too much or making too little for every trade. All these affect the overall expected return of the portfolio in a statistical sense.

Now try doing all the above manually on the fly when you are scalping in a very small timeframe. I obviously cant do it as a human, that is why I use an indicator to automate everything. I still use my human judgement to zoom out and figure out the support/resistance levels (calculated from Orderflow data, not by using hand to draw subjective lines). I just mark it out and let the computer enter if conditions are met. And if the trade is entered, it manages automatically from there. This is objective and mechanical and saves me a lot of stress and subjectivity. I am in my 40s, but with these, I can compete with someone in their 20s trading manually.


mickymelz View Post
But if everyone is using automation to trade then wouldn’t the manual trader have an advantage?

Sorry but this doesn't even make sense to me. It's like saying if everyone is using a computer, then wouldn't using a typewriter give you an advantage??

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  #46 (permalink)
 
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 xplorer 
London UK
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sevensa View Post
Perhaps take a deep breath and recognize that there are other methods, ideas and interests beyond just your own and unless appointed, you only speak for yourself.


kcrawford View Post
Do you feel better now?
1) I never said I spoke for anyone but myself...
2) I never said my way was the only way...
3) you imagine an awful lot going on here that isn't going on...
4) the thread asked for my opinion, I gave it...you don't seem to like it...get over it.
5) nobody asked you to moderate.

but again, feel free to continue your imaginary argument if it makes you feel better.

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Moderator Notice


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  #47 (permalink)
 
kcrawford's Avatar
 kcrawford 
Honolulu, HI/USA
 
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xplorer View Post
Moderator Notice
Moderator Notice


Gladly!

The thread was asking for opinions. I stated mine. Someone decided to make personal comments instead of posting their opinion, so I simply defended myself. I still have zero idea what seemingly warranted the attack.

I'd rather this be just a friendly forum. Thank you for moderating.

I'm done

-K

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  #48 (permalink)
Symple
Zuerich / Switzerland
 
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I have not read all the postings here now and will therefore keep this short.

Basically, it's not just about what indicators can possibly show me, but it's also about how I combine them with other tools available to me, of whatever kind.

Depending on the software that I use as an individual, I can put together whole packages in the possibilities that the respective software offers me, to show my signals for entry or exit with various indicators and other tools. A great software for this is certainly, among other many, the professional version of "Omnitrader".

I am not related to the company nor do I have any connection to them. Only a trading colleague of mine has used it for trading analysis over and over again and I have seen how he has put together his ideas (indicators and other tools) while I was only on the road with Metastock.

Symple

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  #49 (permalink)
 Trailer Guy 
Aguanga, CA USA
 
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If indicators can be arranged to show entry and exit then that can be programmed. Some trades are still entered by humans. The supposedly superior trading algos of the big firms are programmed by humans. The most successful algo firm has only had one truly outstanding pool of money. Lightning did not strike twice. Second example would be the money center trading houses. They do not make consistent profits despite an army of programmers and unlimited resources.

My journey has shown me two types of trading that can work. Neither rely on an army of indicators. Both rely on reading the consistent behavior of human beings.
Day trading using price action. Lots of styles of that shown here. Any method ( PATS.Com, Futures Trader 71, The Strat, etc) take screen time to learn to recognize the patterns. Not unknowing time, guided time where one who can read shows you what they see. You only know what you see so your brain has to be trained. My personal experience is that those patterns are obvious after the fact. Supply and demand levels, options levels, news releases, options expirations etc all need to be followed. It is, I think, what being in a dog fight must be like. Intense concentration, really fast decisions, and hoping you can make it back with half your plane shot full of bullets, because loosing trades are a part of the game.

Longer term swing trading Elliott Wave. Same thing, it is based on human emotion. The practitioners use one hour charts. The good ones will tell you it takes work, time and practice to learn. I follow one such, who has gone to a paid service model. A year ago he turned a $30,000 account into 1 million in January as a a personal challenge posting everything and the account statements online in real time. He admits it has taken him 20 years to learn the skill at his level. With a guide he thinks a couple of years for most. Be warned he has a degree in mathematics and is an internationally recognized landscape photographer which makes me think he sees patterns with greater skill than the average bear. It is, I think, like being on a strategic bombing raid. You have an objective, you know where the defenses are that must be evaded, but all that is theory and the actual mission has lots of twists and turns. Because this is comparing theory to actual losses are small and swift but you must have nerves of steel knowing you have open positions and you are not in front of the screen.

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  #50 (permalink)
TheSwede
Jönköping Sweden
 
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It all boils down to what makes you money in the end. Doesn't matter if its chart reading, indicator signals or a fully automated bot or anything else for that matter.
As long as the way you trade makes you money, its the right way to go for you.

I have tried trading manually with DOM and chart reading, but its not for me. I need a straight forward way to buy or sell, a mechanical system.
Everybody is different, but I like to dissect the market I trade and make indicators that show me the way. I use a bot to execute my trades because I don't have the patience to sit in front of the screen and trade all day.

If you do use indicators you first need to understand what those indicators does and doesn't show you and use them accordingly.
There will never be a "holy grail" so you need to accept losers from time to time, just as you would trading manually by reading a chart or DOM.

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