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the best indicator and settings for swing trades


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the best indicator and settings for swing trades

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  #1 (permalink)
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can anyone share what they think are the best indicators and settings to use for swing trades? or the best cycle indicator to use? with settings?

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Market Wizard
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mystiq View Post
can anyone share what they think are the best indicators and settings to use for swing trades? or the best cycle indicator to use? with settings?


There is no "best" indicator. An indicator does not mean anything, as it is only a projection of price by eliminating some of the information. If you want to trade, you need

(1) a setup, for example

- overbought or oversold condition as identified by one or several indicators
- a trend filter
- a time filter

(2) a trigger, for example

- price moving in the expected direction and making a new n-bar high

(3) position sizing and a stop-loss determined by money management rules (money stop)

(4) a market stop-loss determined by support and resistance as identified by another indicator

(5) one or several targets for taking your profit

This is a system that might give you an edge.

Now each instrument that you can trade shows a different behaviour, depending on the traders that trade them. The vegetation of Madagascar is different from the vegetation of Greenland. And so are the trading strategies of YM and CL traders.

Cycles do have an impact. There is a daily cycle and a weekly cycle. Average volatility is higher on Friday compared to Mondays, so you can build on these cycles, because there is a reason for them to exist. Otherwise identifying cycles is a dangerous game, because you might just invent something.

There are too many former engineers running around that have majored in signal processing. Of course, if there is a cyclical signal, you can find that with some fourier transform, fisher transform, sine wave or fashionable corona indicators. But often there is no cyclical component, and these indicators will produce false signals. If you use cycle indicators, you should be sure that there is a cyclical component first, and an idea is needed why it should be there.

To summarize, I do not use cycle indicators. I prefer indicators that identify overbought and oversold conditions, such as

- support and resistance directly taken from price
- Keltner Channels or Bollinger Bands
- Stochastics, RSI or CCI

in conjunction with volume analysis.

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Market Wizard
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mystiq View Post
can anyone share what they think are the best indicators and settings to use for swing trades? or the best cycle indicator to use? with settings?

In my short trading live i have tested many indicators and the best in the west is without any doubt ParticleOscillator. I use it mainly to identify new potential swing in price action and to quickly identify strength vs weakness (to evaluate the potential of the new emerging swing)

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trendisyourfriend View Post
In my short trading live i have tested many indicators and the best in the west is without any doubt ParticleOscillator. I use it mainly to identify new potential swing in price action and to quickly identify strength vs weakness (to evaluate the potential of the new emerging swing)

Thank you for your input. Where does one find the ParticleOscillator?

Jack

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Market Wizard
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jgreene View Post
Thank you for your input. Where does one find the ParticleOscillator?

Jack

Here:



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mystiq View Post
can anyone share what they think are the best indicators and settings to use for swing trades? or the best cycle indicator to use? with settings?

See the thread "market cycles for fun and profit" by Cunparis . I believe its Elite only as is the particle oscillator . Cunparis is a skilled swing trader and I would check out the many detailed threads hes authored and contributed to here on futures.io (formerly BMT) .

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  #8 (permalink)
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If you have not already done so you need to learn market structure before you begin adding indicators. HH, HL, LL, LH, SH, SL, etc.

Indicators should support your view of price not replace your reading of price. This was a long lesson for me trying to find the perfect indicator. Then I dropped all indicators to review price and added back the few indicators I need to provide support and resistance.

No indicators needed for this last trade. But I do use them for support resistance and I look at the major MAs accepted by the industry to see what they see.

Andrew

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  #9 (permalink)
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Here's a chart that has no indicators or lines on it. Compare it to the prior post where I marked the head and shoulders reversal long. Do you see it here? Before you move to the next post make certain you can mark the head and shoulders on this chart.

The prior chart was the S&P500. This is Google. Very similar.

Andrew

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  #10 (permalink)
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I've added a few indicators that I use.

OBV plus a 30SMA. Notice where we would be entering on the right shoulder long the OBV crosses above the 30SMA.

8SMA. In a strong trend the 8SMA provides moving support.

50SMA. Many individuals use this as their directional bias. I use this as one of my directional bias indicators.

But I don't just enter / exit because prices moves above below and indicator. That will chop you up. I use them to support other things that I am seeing on the chart and to support my price reading.

Notice how in the middle of the chart price popped above the MAs and the OBV moved above the 30SMA? I didn't take this. Price structure was not right for me. Price had not broken the prior price resistance areas or provided the correct reversal pattern for me. So if you only follow the indicators they would have gotten you in. Is that wrong? Not if you manage your money correctly and it is in your plan. But that trade is not in my plan right now.

Andrew

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  #11 (permalink)
new york, new york
 
 
Posts: 49 since Apr 2010
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Fat Tails View Post
There is no "best" indicator. An indicator does not mean anything, as it is only a projection of price by eliminating some of the information. If you want to trade, you need

(1) a setup, for example

- overbought or oversold condition as identified by one or several indicators
- a trend filter
- a time filter

(2) a trigger, for example

- price moving in the expected direction and making a new n-bar high

(3) position sizing and a stop-loss determined by money management rules (money stop)

(4) a market stop-loss determined by support and resistance as identified by another indicator

(5) one or several targets for taking your profit

This is a system that might give you an edge.

Now each instrument that you can trade shows a different behaviour, depending on the traders that trade them. The vegetation of Madagascar is different from the vegetation of Greenland. And so are the trading strategies of YM and CL traders.

Cycles do have an impact. There is a daily cycle and a weekly cycle. Average volatility is higher on Friday compared to Mondays, so you can build on these cycles, because there is a reason for them to exist. Otherwise identifying cycles is a dangerous game, because you might just invent something.

There are too many former engineers running around that have majored in signal processing. Of course, if there is a cyclical signal, you can find that with some fourier transform, fisher transform, sine wave or fashionable corona indicators. But often there is no cyclical component, and these indicators will produce false signals. If you use cycle indicators, you should be sure that there is a cyclical component first, and an idea is needed why it should be there.

To summarize, I do not use cycle indicators. I prefer indicators that identify overbought and oversold conditions, such as

- support and resistance directly taken from price
- Keltner Channels or Bollinger Bands
- Stochastics, RSI or CCI

in conjunction with volume analysis.



thx

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