Your going to get a million different suggestions on this one....You could try TRIX indicator that seems as good as anything else. I haven't tried some of the custom ones for Ninja (if you are a Ninja guy) available around here but I would imagine you would get similar results.
The whole point of these type indicators ..trix, macd, etc.. is for confirmation or supporting evidence if you will for PA. If your going to trade off of these without PA you will loose your rear end. PA is required in just about every situation if you are to survive.
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Yep nothing is infallible but something like a trix or whatever can just give you a bit more confirmation of a trade idea.
I myself use cumulative delta(crappy version of it anyway) along with tick charts but that's not perfect either.....
An oscillator is just a derivative from price. Depending on its formula it eliminates part of the information contained in price.
-> if you use an oscillator with a slow period, it will show you the larger swings
-> if you use an oscillator with a fast period, it will show you the smaller swings
All oscillators lag, the lag being something like half the period used for the oscillator. Also oscillators cannot predict the future.
However, there are some interesting applications.
(1) Time frame transfer: I like to use oscillators with a slow period, as they convey information from the larger timeframe, which I tend to ignore
(2) I like to watch oscillators if they approach the zeroline. A zeroline rejection can be a nice (low risk) retracement entry allowing for narrow stops. However, I would not use them on there own to identify the entry. The potential entry is identified by using various concepts of support and resistance (key levels and trendlines), the oscillator allows for timing the entry.
(3) Slow oscillators can be used as trendfilter. You can for example use momentum (which is an oscillator) with multiple periods to filter your trades.
Last edited by Fat Tails; January 4th, 2012 at 05:31 PM.
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New dog can't learn from old TRIX
I think the TRIX has so much lag and smoothing that it is worth than worseless.
Aw, you know what I mean.
Even the lowly stochastics can be good, if used in multiple time frames. Unfortunate that the Ninatrader system indicator version is very inefficient on cobc false.
Oscillators are best used in conjunction with tick by tick indicators that suggest the locations of turning points. That's where Cumulative Delta, Buy/sell volume, "Better Volume", "Better Pro-Am" etc can help... a lot! Those oscillator extremes are also the places to practice your arcane and mystical tape reading skills!
As FT mentioned, oscillator behavior in the vicinity of the zero line can be very revealing. Take a look at his MACDBB lines oscillator while you're at it.
Last edited by Zondor; January 4th, 2012 at 05:57 PM.
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