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Futures: MACD and RSI confusion


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Futures: MACD and RSI confusion

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Hello, I'm a beginner to trading and am trying out the micro e-minis. So RTY, MES, MNQ...
I was told to use MACD and RSI as indicators to HELP with SORT OF KNOWING when a good entry point would be.
I'm not saying I am using indicators because I know they are 100% accurate at all times.
I'm posting because I'm never seeing anything on any of the indexes that look like anything I'm seeing in online training videos and I'm told I should start here.
The only time I make money is when I don't use the indicators, by accident on my paper trading account, hilariously.
But looking at this chart, what doesn't make sense to me is when MACD lines diverge it's only after the stock goes up so it's trailing indicator.
So that's where the RSI is supposedly there to help. But it's above the line so that means too much buying is going on.

So am I supposed to wait until the RSI is at its support line and going up AND the MACD is going up above the 0 line and diverging?

i.imgur.com/jxszzbV.png

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ImActuallyStupid View Post
Hello, I'm a beginner to trading and am trying out the micro e-minis. So RTY, MES, MNQ...
I was told to use MACD and RSI as indicators to HELP with SORT OF KNOWING when a good entry point would be.
I'm not saying I am using indicators because I know they are 100% accurate at all times.
I'm posting because I'm never seeing anything on any of the indexes that look like anything I'm seeing in online training videos and I'm told I should start here.
The only time I make money is when I don't use the indicators, by accident on my paper trading account, hilariously.
But looking at this chart, what doesn't make sense to me is when MACD lines diverge it's only after the stock goes up so it's trailing indicator.
So that's where the RSI is supposedly there to help. But it's above the line so that means too much buying is going on.

So am I supposed to wait until the RSI is at its support line and going up AND the MACD is going up above the 0 line and diverging?

i.imgur.com/jxszzbV.png

No idea who told you this, for starters.

These indicators basically track how fast price is advancing or falling. Price can still be going up but the rate of travel can be lessening, so the oscillators my go down, indicating a slower advance. This actually might be useful to know, but only if the trader has a good use for the information. In my view (and I do use indicators, and often use MACD) they are not that great if you want to use some mechanical rule such as, "When x happens (indicator does something), then do y (buy or sell.)" Many traders try this kind of thing and probably eventually move on.

Both these indicators, and most indicators that are posted in the panel below price, essentially are doing this -- telling you something about the rate of change of price. This will not tell you where price will go, it just says something possibly useful about what it is doing now. For example, if price is going up, but is slowing down, does that mean it's going to go down next? No. Also, could you not see this anyway from watching price itself? Yes.

I'm not saying not to use indicators, or these indicators, nor that you should use them. If you know what they are doing and if you can put that information to use, then great. Otherwise, don't think you "have" to.

Since you said "The only time I make money is when I don't use the indicators, by accident on my paper trading account, hilariously," that makes me think they are not exactly helping you.

There will be a lot of heated opinions on the subject, which I think it is generally best to ignore, whether pro or con, and see what, if anything, an indicator can help you with in your actual trading. If it is not useful, move on would be my suggestion.

As in anything in trading, your experience matters more than anything else. You mentioned "online trading videos." I would not place a great deal of trust in them. See what makes sense to you, and what makes you money, and let that be your starting point. -- Just some general advice on evaluating trading information, overall.

Bob.

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bobwest View Post
No idea who told you this, for starters.

These indicators basically track how fast price is advancing or falling. Price can still be going up but the rate of travel can be lessening, so the oscillators my go down, indicating a slower advance. This actually might be useful to know, but only if the trader has a good use for the information. In my view (and I do use indicators, and often use MACD) they are not that great if you want to use some mechanical rule such as, "When x happens (indicator does something), then do y (buy or sell.)" Many traders try this kind of thing and probably eventually move on.

Both these indicators, and most indicators that are posted in the panel below price, essentially are doing this -- telling you something about the rate of change of price. This will not tell you where price will go, it just says something possibly useful about what it is doing now. For example, if price is going up, but is slowing down, does that mean it's going to go down next? No. Also, could you not see this anyway from watching price itself? Yes.

I'm not saying not to use indicators, or these indicators, nor that you should use them. If you know what they are doing and if you can put that information to use, then great. Otherwise, don't think you "have" to.

Since you said "The only time I make money is when I don't use the indicators, by accident on my paper trading account, hilariously," that makes me think they are not exactly helping you.

There will be a lot of heated opinions on the subject, which I think it is generally best to ignore, whether pro or con, and see what, if anything, an indicator can help you with in your actual trading. If it is not useful, move on would be my suggestion.

As in anything in trading, your experience matters more than anything else. You mentioned "online trading videos." I would not place a great deal of trust in them. See what makes sense to you, and what makes you money, and let that be your starting point. -- Just some general advice on evaluating trading information, overall.

Bob.

I learned this from a YouTube channel called "Day Trading Micro Futures" by Don Singletary, in a 4 lesson series called "How to win with MACD indicators BUY signals and how to manage losing trades".

There are other videos out there as well that speak a similar lesson.

They essentially correlate the buy/sell points with the points on the MACD and/or RSI. So it seems they're just getting lucky through coincidence.

Thanks for the guidance on this topic. I remember failing hard early in my career, now I haven't made mistakes in years and am very careful.
Sucks I have to re-live all that with stocks now, especially with all the misinformation floating around, but it is what it is.

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ImActuallyStupid View Post
I learned this from a YouTube channel called "Day Trading Micro Futures" by Don Singletary, in a 4 lesson series called "How to win with MACD indicators BUY signals and how to manage losing trades".

There are other videos out there as well that speak a similar lesson.

They essentially correlate the buy/sell points with the points on the MACD and/or RSI. So it seems they're just getting lucky through coincidence.

Thanks for the guidance on this topic. I remember failing hard early in my career, now I haven't made mistakes in years and am very careful.
Sucks I have to re-live all that with stocks now, especially with all the misinformation floating around, but it is what it is.

There's all sorts of stuff out there. Some may even work.

The problem is that no one is going to go online and tell you "all you need to know" to be a successful trader. Why not? Probably because real successful traders don't need the YouTube income, nor the income from selling trading stuff.

So take what you can put to use in your own trading. If you can't use it, don't assume you're missing anything. Just move along and keep trading. Screen time, practice, learning loss control, learning to have a productive emotional response to trading, getting familiar with how your markets work by following and engaging with them, these will do better for you, as a rule, than someone's special indicator methods.

This is not to say that MACD and RSI can't be helpful. But I wouldn't lean very hard on them. Many, many traders never use anything like them.... and others do. It can be confusing until you realize that it's not just the tool, it's what the person using it does with it.

I suggest reading some of the trading journals here. You will see what some other traders are doing in actual trading, be it good or bad. This can help a lot.

Trading is a skill and a practice. Approach it that way and you may find you can get it quicker. Its lessons can't be learned from videos, courses or books, even good ones.

Good luck.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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