Mulicollinearity (Novice Chart Error) - Traders Hideout | futures io social day trading
futures io futures trading

Mulicollinearity (Novice Chart Error)
Updated: Views / Replies:2,069 / 3
Created: by mcteague Attachments:1

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 100,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Thread Tools Search this Thread

Mulicollinearity (Novice Chart Error)

  #1 (permalink)
Elite Member
New York NY USA
Trading Experience: Beginner
Platform: esignal, ninjatrader,
Favorite Futures: Stocks
Posts: 113 since Oct 2012
Thanks: 55 given, 30 received

Mulicollinearity (Novice Chart Error)

In another post I mentioned that I had reduced my charts to two indicators; CCI and TSI. At the time I believed one was a trend indicator and the other a momentum indicator. This is totally wrong.

I found this article on Stockcharts on Multicollinearity,

Multicollinearity - ChartSchool -

(this by the way, is the only other site I recommend. So I hope Mike does not mind the link. I am not sure what the rules are)

In any event multicollinearty is a statistical term for using different indicators to reveal the same information. In my particular case if you use the same time frame a CCI line fits almost exactly on top of a TSI line. I am getting exactly the same information. Not different information. It is important to know what each of your indicators is really designed to show and to make sure you are getting all the that you want from them.

As I am surely not the only person to make this error, I thought I would pass along the link and the concept.
I have made major changes in my charts because of it.

Reply With Quote
The following 5 users say Thank You to mcteague for this post:
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

  #3 (permalink)
Elite Member
Berlin, Europe
Trading Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
Fat Tails's Avatar
Posts: 9,753 since Mar 2010
Thanks: 4,231 given, 26,088 received
Forum Reputation: Legendary

This is in fact one of the most common errors that can be observed when studying charts of beginning traders.

Many indicators are based on a projection of price, and what is displayed on the chart is always the same old price wolf, which comes in the clothing of fancy indicators.

Please register on to view futures trading content such as post attachment(s), image(s), and screenshot(s).

To avoid the trap, it is better to use information from different sources such as

- significant past price levels not shown on the chart
- volume
- market breadth (NYSE-TICK, TRIN)
- correlations

No indicator is needed to display momentum or a divergence, rising or falling prices, the loss of momentum creating a divergence can be directly observed from the price bars.

Reply With Quote
The following 5 users say Thank You to Fat Tails for this post:
  #4 (permalink)
Elite Member
Portland Oregon, United States
Trading Experience: Beginner
Platform: Ninjatrader®
Broker/Data: CQG, Kinetick
Favorite Futures: Gameplay Klownbine® Trading of Globex
Zondor's Avatar
Posts: 1,336 since Jul 2009
Thanks: 1,246 given, 2,676 received

Excellent observation

Seeing the same thing in a lot of different ways does not add any value.

In addition to the data mentioned in the preceding post, price information based on time frames other than those of the chart master instrument can be very valuable (Visual MA's, etc).

"If we don't loosen up some money, this sucker is going down." -GW Bush, 2008
“Lack of proof that something is true does not prove that it is not true - when you want to believe.” -Humpty Dumpty, 2014
“The greatest shortcoming of the human race is our inability to understand the exponential function.”
Prof. Albert Bartlett
Reply With Quote
The following 3 users say Thank You to Zondor for this post:


futures io > > > Mulicollinearity (Novice Chart Error)

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

Journal Challenge $1600 in Prizes & Free Journalytix for all participants!


The Driving Force Behind the Market w/Earn2Trade

Mar 5

TBA w/Stage5 & iSystems

Mar 12

TBA w/John Grady @ No BS Day Trading

Mar 19

Day Trading Oil Futures: Reducing Risk & Increasing Profits w/DTN IQFeed

Mar 26

Similar Threads
Thread Thread Starter Forum Replies Last Post
Which is best market for novice? allysius2005 Psychology and Money Management 11 July 14th, 2013 06:14 PM
some novice questions about Footprint/Numbers bars, volume by price, etc. Sayounara Traders Hideout 5 November 25th, 2012 10:47 AM
Some help for a complete EasyLanguage novice seaneking EasyLanguage Programming 5 April 4th, 2011 12:18 PM
spreadsheet novice PandaWarrior Psychology and Money Management 3 December 9th, 2010 09:12 PM
NT crashes "Error on loading chart" john924 NinjaTrader 7 September 7th, 2010 01:49 AM

breadth, cci, data, divergence, futures, indicators, information, loss, momentum, nyse, statistical, strategies, tick, time frames, trading, trend, trin

All times are GMT -4. The time now is 11:01 AM. (this page content is cached, log in for real-time version)

Copyright © 2019 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432 WhatsApp Business,
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2019-02-23 in 0.20 seconds with 15 queries on phoenix