There is no one technical analysis indicator that will win 100% of the time. There is no holy grail of charting... and if there is, then someone is keeping one hell of a secret. However, technical analysis techniques can help you make educated decisions, putting the odds on your side that you are on the favorable direction of a move.
So the question is...
"Besides MarketClub's 'Trade Triangles', what is your favorite technical analysis indicator?"
Winner will receive 6 workshops on technical analysis from our authors in INO TV. These MP3s and digital PDF workbooks will be mailed to you courtesy of INO TV.
Construction & Application Of The MACD Indicator
The Theory of Momentum & Lane's Stochastic - George Lane
The Relative Strength Index Explained - Andrew Cardwell
Classic Technical Analysis as a Powerful Trading Methodology - John Tirone
Applying Fibonacci Analysis to Price Action 1 - Joe DiNapoli
Applying Fibonacci Analysis to Price Action 2 - Joe DiNapoli
How To Enter:
Comment on this post telling us what your favorite technical analysis study is and why. There are no wrong answers.
We want to you to share your thoughts and stories with our other visitors. Here are some responses from in the office to get you started:
Bob F. : I'm a fan of the MACD. I like to backtest various exponential moving average and signal settings for different markets.
Melissa P. : Average True Range is one of my favorites. I don't use this indicator for any other reason that to see activity. I can quickly see how much a stock has been moving throughout the day and leave the stagnant stocks alone.
Kenny S. : I have been trying to study up on the concepts regarding standard deviation. I'm still learning about Bollinger bands, but it's something that is very interesting thus far.
Lindsay T. : The MACD is one of my favorites too. I use the MACD crosses to confirm the "Trade Triangle" signals. When the market is moving sideways, I don't always follow each and every "Trade Triangle" unless I have a confirming back up.
1. This contest is open until 11:59 PM on October 31st.
2. No wrong answers, any participation counts as an entry.
3. One entry per email address.
4. Winner will be picked by random integer software.
5. Winner will be contacted on Monday, November 3rd via email.
79 thoughts on “Trader's Blog Contest For October”
MACD along with RSI crossing the 50 line. Most accurately and proven trigger to get you an dout of positions.
Hi, I deal forex day trading.
I use stocastic and pivot point which
give me good indication of opportiunities
to enter or close position.
I like using MACD set at 6,13,5. This tends to give an indication prior to a firm buy signal.
I like bollinger band ,EMA ,RSI,MACD.
EMAs - 5, 30 and 200 for the short, medium and long time frames.
I also rely heavily on Force Index, described by Alexander Elder in his books. Not too many packages have it available. It is indispensible for showing the loss of buying "force" that could herald a top in particular. At worst it shows that the proces at support (or a parabolic SAR reversal) will probably collapse because the buying volumes are declining.
Yep, Force index got me out of the Australian market 12 months ago, preserving cash for the next trends.
Best of luck to everyone - we all know that it is not easy, but better than "time in"!
MACD leads all other indicators.
I like the MACD as one of my main confirmations.
I like simple moving average 20 period to confirm trend, then a stochastics divergence, to show unrealized strenth or weakness. This signal is good on all time frames, especially during period of flat to no trend.
Momentum, I like to trade ETF's, and this is what I look for, both on the long and the short side. Would your services help me in trading etf's ?
I like momentum, relative strength indicators. I like to trade etf's, both long and short.
I am a new trader and have to learn a lot . All the help i can get is important to me.Send me all the help you can give me .Herman
I like the Hull Moving Average because it helps me to gauge when trends change.
I use the Bollinger band in my analysis as well as the Parabolic SAR. I observe that it is seldom that the stock stay outside the Bollinger for a long time. It always tend go back to within the band. I also tried the parabolic SAR to time my exit and it work for me one time. obcourse, this goes with the Volume.
Parabolic SAR - the picture is obvious, no guessing game... combine them on three TFs and you know exactly where the market is going. PSAR is also very good for timing your entries and your exits.... it forces me to stay in trade for a much better profit... just a great all around indicator!
I like the candlestick formation and what they can tell me about the buyers and sellers as well as whether we are in an oversold area or not.
I use two, first I look at the average both 5 and 10 days. and get a second opinion using the MACD.
I only do this on stocks that have a proven potential. I don't have time for any others.
My favorite Technical Analysis is the 30 day Moving Average or the 90 DMA which can indicate how the stock has performed on a particular month or a particular quarter.
I would always go by Volumes as an indicator of the BUY/SELL and would certainly look at 52 Week Highs and Lows. Next would be to go back to the Fundamentals - Balance Sheet for current quarter results and check Net Profits and Debt (High debt is an indicator that company's is not Performing well or Mis-Management).
Analyze a Stock with comparison with Peer Companies and assess the strength.
Last Golden rule is to stick to Long Term Investment and rather than Short Term Trading strategies. Before Entering a Stock by (News,Reports, Word of Mouth / Analyst advice) Do a thorough analysis of a stock on its fundamentals and evaluate the potential of the stock to GO UP/DOWN.
I use a combination of Triangles and Telechart to define my daily moves. I look at ADX for momentum, MACD and Stochastics with an 8,3,3 setting. I also look at Rate of Change as well for confirmation.
My favorite involves using a combination of three indicators: Acceleration Bands (similar to BBands), Williams % R and MACD for confirming Call/Put opptys...
First requirement is for Price to breakout/breakdown of the bands. The trigger that confirms a Buy/Sell oppty is when the Williams %R moves above the 80%/below the 20% line, and the MACD averages cross over.
The Buy is on the next candle.
Stop loss is a close below the low/above the high of the Price bar that confirmed the W%R Sell trigger signal.
Exit is a cross over of the MACD.
I'm not a daily trader yet due to lack of exp.
I'm learning especialy from your excellent int.
published material, nevertheless, your triangle,
fibonaci and macd give the best picture for day
trading for. I must addmit that since I'm so short a time in this bussiness, rsi,roc and sma
have'nt been experienced enough though they can be good backers/supporters to the other three.
Thankyou for evaluating my novice/zero knowhow.
I like a 30-period Williams %R. Once the indicator moves above the overbought (or below the oversold) level, I then look for a close above (or below) that day's high (low) for a trend confirmation. Once the trend is confirmed, I then look for an entry near the low of the first bar to trade with the %R below the overbought level (high of the first bar above the oversold level). I like this entry as it has a tight stop and good success ratio. Any trade should also be confirmed by trade triangles, and at least one other indicator and (or) support/resistance levels or trend lines.
I also like this approach as it's a bit out of the conventional without being mystical.
I like Moving Averages, I think they give a real up to date situation of where the market is at.
-1 hour candlestick chart
-10 period EMA using the high price
-10 period EMA using the close price
-10 period EMA using the low price
Long (buy) Trade Rules
1. Buy one lot when a candle closes below the 10 period EMA high but above the 10 period EMA close and the previous candle closed above the 10 period EMA high.
2. The stop for this lot is placed at the 10 period EMA low.
3. While we are long one lot and ONLY IF the price closes above the 10 period EMA, we add 2 additional lots, each separately. We are now long 3 lots.
4. Move the stop on the first lot to break-even.
5. The stop on the second lot should be placed at the 10 period EMA close.
6. The stop on the third lot should be placed at the 10 Period EMA low.
7. There are no limit orders used with this strategy and positions will only be closed when the stops are hit. Lots 2 and 3 should be trailed by the 10 period EMA close and the 10 period EMA low, respectively. When the 10 period EMA low is equal to the breakeven point for the first lot, we should now be trailing the stop on the first lot with the 10 period EMA low. This means that at this point, lots 1 and 3 should be trailed by the 10 period EMA low and lot 2 should be trailed by the 10 period EMA close.
Short (sell) Trade Rules
1. Sell one lot when a candle closes above the 10 period EMA low but below the 10 period EMA close and the previous candle closed below the 10 period EMA low.
2. The stop for this lot is placed at the 10 period EMA high.
3. While we are short one lot and ONLY IF the price closes below the 10 period EMA low, we add 2 lots, separately. We are now long three lots.
4. Move the stop on the first lot to break-even.
5. The stop on the second lot should be placed at the 10 period EMA close.
6. The stop on the third lot should be placed at the 10 Period EMA high.
7. There are no limit orders used with this strategy and positions will only be closed when the stops are hit. Lots 2 and 3 should be trailed by the 10 period EMA close and the 10 period EMA high, respectively. When the 10 period EMA high is equal to the breakeven point for the first lot, we should now be trailing the stop on the first lot with the 10 period EMA high. This means that at this point, lots 1 and 3 should be trailed by the 10 period EMA high and lot 2 should be trailed by the 10 period EMA close.
I am still looking for indicators - I am so tired of most of the jiberish - MACD, Stochastics, etc are pretty much the same - most of them you canb just follow the price of the stock and get the same trend line!
Certainly, we all tend to use several indicators to help in our decision making. The one I tend to get the most out of is the Bollinger bands with several moving averages. I know that when the bands are narrow that the volatility is low and an expansion of volatility is coming. I watch for stocks that are walking the bands and they work well to show extreme moves. I know that there have many other uses and will continue to explore and learn the subtletys
of this indicator.
In addition to the trade triangle I use RSI to enter my trades.When its larger than60-68, I will enter the trade.
My fav are the MACD and the 50 day moving average.
I like using the ARSI. It isn't always available but seems to lead moves in the price of a stock. I couple that with Stochastics and 8/20 Simple moving averages.
I use Ichimokiu clouds concentrating for setups with crossovers of the Tenkan and Kijin preferably over or under the clouds for the strongest signal. I have backtested these on Blocks and have had it a very good signal setup. I like the fact I can quickly see support and resistance and that you can project out the clouds for future support or resistance. I addition I use DMI and MACD to confirm setups.
I am primarily an option trader and use William %R and Bollinger Bands exclusively.
I trade the FOREX specifically the EUR/JPY I trade the 5M charts andtreat it like a job. I "work" from 3:30PM to 10:00PM daily. The EY has a slack periiod starting at 2:00PM LA time and this creates a squeeze most days in the Bollinger Bands. Combined with Stochastics I enter when Price is at the extreme of the bands and STO is in agreement by being at the same extreme. I also use the breakout of the squeeze and follow STO to the other extreme 4To6 trades daily and lots of$$$
Wells Wilder's Parabolic Stop and Reverse.
The SAR acts as a very good confirming indicator to other strategies. It is never a good idea to go against the SAR. The SAR works in all time frames and all markets.
candle stick, oscillator, moving averages and momentum for a swing trade
welles wilder dmi for a longer term
My all time favourite is a specially designed Average True Range (ATR) as originated by the great Chuck LeBeau - but now taken to a higher level.
It is constructed as a single line on the main trading chart ( any periodicity) using 10 Periods and 2.5 ATRs (may be modified to suit).
When price moves up above 2.5 ATRs the Line is set below the price action and when price falls 2.5 ATRs the Line switches to sit above the price action. I use this as confirmation for received Trade Triangles and use it in exactly the same way as MC......Monthly chart for the Trend and then switch to Weekly chart for timing/entry. Works just as well for Longs as for Shorts.
A final fail safe may be used - a 30 SMA which simply confirms if the current price action is above the SMA line ( Monthly and Weekly) and it must also be rising for a gliding/rising Long or sliding/falling for a Short.
This ATR tool is highly recommended to MC to be provided along with the existing tools.
Moving Averages - 21 & 50 period - they make most of my bread and butter trades. They show trend, trend reversal, entry and exits.
hello, i like Fibonacci and I like using the fibonacci retracement in conjunction with ino trsde triangles.
My favorite technical indicator is my brother who uses a chart book, a ruler, a red pen and a cell phone to his broker as we work through trading together.
I use classic old time market analysis. I am what you might call a " long pull trader " . Sometimes my trades have lasted as long as 4 months. I use the techniques used by traders who were trading during the depression era and later. Literally just give me my paper chart book , a ruler, pen, sticky notes and my cell phone and I can go to work from there, successfully I might add. And yes, I still use a broker in Chicago. He charges me more in commissions than e-trading the mkts myself. I honestly don't care what he charges me . My profits for the year aren't based on what I pay in commissions. It's all about how well I do as a trader.
I like using the fibonacci retracement in conjunction with ino trsde triangles.
I am very new to trading. I like trend lines and moving averages and sometimes RSI...very simple. I also really like the concept of trade triangles!!! As soon as i get enough savings, i'm going to join INO. I also like to diversify on each trade day. I am standing on the shoulders of a giant before me....Adam H. and learning from his blogs and generosity of demo video's. Thank you Adam.
Simple moving average crossover. When the 21 day crosses the 50 day and is backed up by the Stochastic moving out of overbought or oversold especially if there is divergence present with the MACD.
for my trading method,I use EMA 15 & 30 for longterm chart(weekly), and EMA 30 & 100 for shortterm chart(15 minutes and Hourly).and for back up added MACD to confirm the trend.for range trading i use stochastic(slow) 10,10,5.and at last must be combine with Market sentiment(pshycology).Thanks.
I LOVE MACD AND RSI INDICATORS COMBINATION WHICH GIVES ME A GOOD TRADING IDEAS I DON'T KNOW MUCH ABOUT THEM AS I AM NEW TO TRADING.
VOLUME FOR STOCKS; CANDLES FOR FOREX; LINEAR REGRESSION LINES FOR TREASURY FUTURES.
I like to use both long & short term moving averages with bolenger bands
Preferred indicators: RSI 14, Bollinger Bands & Fib retracements.
Favorite indicator. Easy. Because it's easy to use. The MACD. It gives an early indication of momentumn to the long and short side. I do this by first looking at the MACD on a monthly price chart. This give me the strength and overall direction of the equity, forex, currency, futures, or commodity. I then just wait for a divergence between the price and the MACD to make a trade. Simple and easy to use.
I adore the ADX indicator as it provides an indication of the strength of the current trend and additionally provides buy and sell signals, similar to stochastics, when the DI+ and DI- lines cross.
I like to use cycles with MACD and %R as confirming indicators.
I use Bollinger bands with MACD and moving averages 10, 20, 50. I use this combination to tell the trend direction and if conditions are oversold/overbought.
I like Fibonacci retracement and extension. It reall is amazing when confluence is found. That together with major Support/Resistance is very powerful. A an indicator like MACD for divergence and its a winner!
i guess i dont have one particular favourite - I look to see when MA's , RSI and MACD are all aligned up together indicating the same thing.
I use moving average (10MA 20MA 31EMA), Fast Stochastics, MACD and ROC.
I like the pinch play and this is how it works! On a daily chart I use the PPO and the ADX.I watch the PPO trending down and the ADX trending up,as they come together they form a pinch.Step.2 The buy signal comes when the PPO and the ADX start a divergence from each other.They are a lot of settings to play with but I like the PPO at 16 32 9 and the ADX at 13 8.with. I like to see some increasing volume and my Candle moving above the 9EMA.Its a good setup and very easy to use with high probibility of success.
Keeping it simple, I always incorporate moving averages. The 50-day and 200-day MA's are pretty standard but I use the 10, 15, and 20-day MA's for long positions and the 5, 10 and 15-day MA's for short positions.
Moving averages hands down!
I use three main indicators First MA crossover, Second RSI has to be above 50% line to Buy & below 50% to sell, Third DMI to confirm direction of the trend. I also always trade in the diection of the weekly trend.
I use price action for my entry into a trade.The only indicator always on my charts is 21 SMA. This is only used for knowing the trend direction.
I only take trades in the direction of the trend and never against the trend.No trade is taken when the 21 SMA is flat.
I use only daily chart for my trades and weekly charts to confirm trend direction indicated by the 21 SMA.
All of the indicators mentioned have merit. I use simple moving averages and slow stochastics a lot but my very favourite is the Gann Roadmap. I have used Gann analysis for a number of years and it can be uncannily accurate. It has the advantage of showing, in advance, where a market may be headed. It's major disadvantage is that books on the subject seem to be difficult to understand.
I like the PSAR with the DI+/- it's been more reliable for me than any other indicator.
Trading is all about probability so I have several indicators that I like to use on different timeframes to put the odds in my favour:
- MACD on higher timeframe for the trend - Day
- DMI-ADX on Intermediate timeframe - 4H
- Stochastics for timing - 1H.
I think my technical analysis indicator will have to be "the trader mindset" chosen from the main three categories that Adam has underlined several times in his interesting videos:
* money management,
* market analysis (includes technical analysis),
* psychological aspects of trading.
I'm a fan of Wyckoff and Volume Spread Analysis, so volume while using candlestick charts works for me. (Fib projections also help with targets for entrances/exits.)
Larry Mc Mallain system which he got from ...
Short Term Trading indicator
Let M = the current exponential moving average;
"New" M=09*M+0.1* (Today's advances-declines)
advances = 1200
Then "new" M = 120
Market is over bought when M.200
Market is over sold when M, -200
Sell signal : when M falls below 180 after having been over bought/// Buy signal : when M rises above - 180, after having been over sold STOP YOUR SELF IF SIGNAL GOES ON ALERT AGAIN e.g. if on a sell and M rises above 200 or if on a buy and M falls below -200
prefere to buy OEX options with this signal can be used as an intermediate term indicator.
I day trade, and am big on RSI 2 & 4 periods, ATR, and EMA 3/13, in fact I can't imagine trading w/o these three...RSI defines dips/rallies for entries. The 3-13 EMA cross for the entry trigger. And for exits I use ATR which is indispensible because there is NO other indicator that offers such a clean, accurate, and unbiased exit....
MACD for trends and stochastics for tradihg range are great tools.
I Like Wyckoff method of trading as well.
My favorite indicators are a 14/3 slow stochastics or CCI together with a 50EMA to define the trend. If the 50 EMA is sloping upward I wait for pullbacks to support zones with the stochastics giving oversold readings below 20 or CCI below -100. I enter on the first uptick in the stochastics. For example, day 1 stocs 12.5 low of move down stocs uptick next day 16.5 I will enter the next day on a takeout of the uptick days price high or the next day after the CCI having been below -100 closes greater than -100. Stops under the last pivot low. Therafter ignore all overbought readings on stocs or CCI and manage the trade with either trendline breaks of trailing stops under swing lows or downturn in the 10day EMA, depending on what your comfortable with. Follow the reverse for shorts with 80 plus on stocs or +100 on the CCI and a downward sloping 50 EMA and prices rallying into resistance zones. Enter on first down tick on stocs above 80 or CCI dropping below +100. Same trade management trendlines or swing point lows or 10 day EMA turning up, and ignore all subsequent oversold readings in stocs or CCI as the trend of the 50 EMA is down. I use this on daily charts but based upon the daily slope of the 50 EMA the same entries can be taken on the intraday hourly charts using your daily or weekly chart support and resistance levels.
My favorite technical indicator is the human mind. I've tried just about every indicator out there and until you understand and I mean really understand how the markets work none of the indicators are different than any of the others. If I were only able to have a price chart with just one indicator my choice would be volume.
MACD and RSI, plus commonsense (should be first) and position sizing.
One of my favorites is LeBeau's Chandelier SAR (3,21). I use the Chandelier stops to depict reversals. This combined with trend channels, support and resistance lines and volume. When price approaches these lines on low volume I wait for the Chandelier stops to trigger my entry or my exit.
My favorite is MACD, together with it I like to use full stochastic and also Bollinger bands to see how the trend is performing.
I use day charts and like to see break outs in any direction.
I use Weekly charts mostly over a 3 or 5 year frame. In tandem, I have the RSI 14, MACD (regular one), and sometimes On balance volume.
What I look for is Negative or Positive Divergence! This is a Spectacular sign of change that is ahead.
For example, if a stock has been rising in price for the past year however, the RSI has actually decreased this is a Negative Divergence and it is an indicator that fewer people are buying into it and thus it will rollover very soon.
I like Wells Wilder's parabolic SAR, stop and reverse, and to confirm use the CCI, briefly buy +100 breakout or -100 from below, sell +100 and -100 breakdowns. There is even a school for the CCI.
For intraday on sp500, it is rsi, volume and %k%d and Fibinocci and support/resistance.
For daily to monthly, use support/resistance levels, moving averages, volumes, macd/signal line, on balance volume, historic voltility 10/100 days, fibinocci levels, rsi. Need to get confirming data from each.
I like to use at least 3 indicators like huge volume with macd lines cross above with positve histogram and price above 2 moving averages after end of downtrend to confirm the new uptrend, adx with dmi plus cross with dmi negative, or stochastic cross above zero in a strong stock
As a stand alone indicator, I like to use the Wilder DMI. It gives enough information to trade by itself (although I'd never do that), combining the direction indicator with the strength of the current trend using the ADX. The DMI also gives reliable reversal signals when the ADX breaks out above the current directional indicator and then rolls over.
My favorite indicator combination is:
3. Wilder %r
I use this combination to spot reversals using the following rules:
1. Aroon crossover meaning the red/down aroon needs to cross the green/up aroon (the green needs to go up, while the red needs to head south or move down crossing like an x)
2. The wm% needs to rise above the -50 line.
3.The ppo needs to cross above the zero line.
For bearish crosses:
1. Aroon crossover meaning the red/down aroon needs to cross the green/up aroon (the green needs to go down, while the red needs to head north or move up crossing like an x)
2.The wm% needs to drop below the -50 line.
3.The ppo needs to cross below the zero line.
For these indicators I use a daily chart.
Aroon (20) period
Williams %R (20) period
I start with price and volume in 4 time frames, with a std stochs. Plot the pivot for the day and factor in the opening gap, add in my SAR lines, gaps, ATR and wait for a familiar pattern at the right time.
No one thing stands alone, it's the confluence of a few and a long experiance with your stock and the market. Oh and of course bullet proof money management.
For the day traders out there, I use a Slow Stochastics in a slightly different way. I use a 14/3 Slow Stochastics, and use 25 and 75 for oversold (OS) and overbought (OB) levels. On a 5, 10 or 15 minute chart, when Stoch bar closes above 75, go long (I use the ES). When Stoch bar closes below 25, go short. When the OB and OS levels are reached, they typically pop a bit, which makes for a quick day trade profit. This DOES NOT work for position or longer term trading. Use your own strategies to exit. One possibility is when %d crosses %k.
Market profile: because of the graphical depiction of price and time.
MACD - it is one of most universal indicators, showing general direction of a trend, the "power" of a trend, overbought/oversold conditions as well as divergences.
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