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  1. #1
    Active Member ehenderichs's Avatar

    Use indicators with default values or tweak them !!!

    Started reading Technical Analysis for Dummies and the author makes an interesting statement. Offcourse I am interested in your opinion about this claim.

    Statement: Use technical indicators always with their default values. These are the optimum across several years (decades) of testing AND work across all timeframes.
    In the reading it also states a lot of traders keep tweaking parameters to make the best possible fit with past price action. But this holds no guarantees for the future.

    Very curious about your opinion.

  2. #2
    Veteran Member Ronnel's Avatar
    Quote Originally Posted by ehenderichs View Post
    Started reading Technical Analysis for Dummies and the author makes an interesting statement. Offcourse I am interested in your opinion about this claim.

    Statement: Use technical indicators always with their default values. These are the optimum across several years (decades) of testing AND work across all timeframes.
    In the reading it also states a lot of traders keep tweaking parameters to make the best possible fit with past price action. But this holds no guarantees for the future.

    Very curious about your opinion.
    For me I'll go with what the author wrote because if one is skilled with price action the default setting should work because he will just be using the indicator as a guide only or take it as second confirmation only and not place trades because of the crossovers or signals that the indicator has made. The default setting is more than enough for a skilled PA chartist but with the "not so skilled" trader naturally they will be trying different settings to fit the time frame of the chart so that they can easily see what they want to see. These are people who rely more on signals from the indicators and not really be that good on PA though may not accept it. But this is only my opinion so I may be wrong...

    Another is I would like to share with you something similar that happened on Skype Group today. I was giving a charting tip to one of the members about how to use imaginary indicators to benefit his trading skills.
    Since it's "imaginary" I was expecting him to learn it PA style but he instantly asked "is that 10 EMA?", I instantly got pissed because I'm trying to teach PA and he asked about the setting, WTF!!! I'am a fully naked chartist meaning that I don't use any indicator on my chart and since "fully" means that I only rely on the data on the chart and totally ignore anything outside of it and this include ignoring or not following the news. What I see is what I trade (pure price action). There too was a time when I used indicators before I shifted to pure naked charting and have tweaked the settings a lot in hope to find my holy grail trading setup. I spent months tweaking the indies and as the months went by, I noticed that I was getting better with PA and slowly realised that I was not taking signals from the indies anymore and was just using them for secondary confirmation. I also noticed that whatever indicator setting that I use (tweaked or default) the results were the same so I just left them at default. Maybe during those times I was getting better on PA and not relying much on indicators anymore that the default setting worked just fine. I think is that give any good PA chartist any indicator may it be tweaked or not (unless it's a stupid setting like 400EMA on M1 chart, lol!) he will just be fine because his focus is more on PRICE and will just use the indie as a guide or for second confirmation and will not use it for signals and crossovers.

    Since the book is Technical Analysis for Dummies, I'm sure that the author who wrote is very skilful and is a very good PA chartist and maybe this is the reason why he wrote that. I'm not against tweaking the setting but for the love of Pokemon, I just hope that they spend more time learning how price move than spending hours changing the settings. I've been there and have done that and whenever I remember those "tweaking days" gives me a smile on my face... (not just a simple smile but a smile of remorse because I really feel stupid, lol!)

    Just my personal opinion so please don't torch me
    Last edited by Ronnel; 11-24-2016 at 07:20 PM.
    Duct Tape can't fix OTM

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  4. #3
    poe
    poe is offline
    Senior Member poe's Avatar
    Quote Originally Posted by Ronnel View Post
    I'm sure that the author who wrote is very skilful and is a very good PA chartist and maybe this is the reason why he wrote that.
    Or SHE might just be the wife of one of those famous Rockefeller ....
    "He who makes a BEAST of himself, gets rid the pain of being a MAN" S.J

  5. #4
    Active Member astravars's Avatar
    Quote Originally Posted by poe View Post
    Or SHE might just be the wife of one of those famous Rockefeller ....
    and that sounds a bit like a sexism.

  6. #5
    poe
    poe is offline
    Senior Member poe's Avatar
    Quote Originally Posted by astravars View Post
    and that sounds a bit like a sexism.
    it is not sexism... It is a fact !
    "He who makes a BEAST of himself, gets rid the pain of being a MAN" S.J

  7. #6
    Legendry Member milos's Avatar
    Quote Originally Posted by ehenderichs View Post
    Started reading Technical Analysis for Dummies and the author makes an interesting statement. Offcourse I am interested in your opinion about this claim.

    Statement: Use technical indicators always with their default values. These are the optimum across several years (decades) of testing AND work across all timeframes.
    In the reading it also states a lot of traders keep tweaking parameters to make the best possible fit with past price action. But this holds no guarantees for the future.

    Very curious about your opinion.
    Hello and welcome to Communitraders!

    By my opinion you have to create your own trading strategy. It includes trading indicators entry/exit points and time frame expiry. You can see a lot of trading dairies and strategies here.I hope so you can adopt it here.Join our skype group and watch Communitraders Youtube channel.

  8. #7
    Legendry Member Okane's Avatar
    Hey.
    All I can tell you is that whichever setting you use, you are gonna fail big time if you can't read the charts.
    And that's actually why most traders lose. The focus is tooooo damn much on the indicators. They insert like 5-10 indicators
    on their charts and they don't know how any of them work and they can't even see the charts. I call those charts Christmas trees.
    Anyway, Ronnel already explained about the PA and naked charting stuff so no need for me to keep ranting lol.
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  9. #8
    Legendry Member willyw's Avatar
    Okane and Ronnel, is correct. Don't decorate your charts to be so fanciful that you cannot see your charts. Make it clean

  10. #9
    Legendry Member Michael Hodges's Avatar
    Well, since the indicators are really measuring where people are entering and exiting the market, where the bulk of traders want to buy and where they want to sell and when they get excited and such I think using the default settings is the right thing to do... they are the settings that 98% of all traders use and the ones that will show you what those traders are doing, and when you get a convergence of indicators, where more than one indicator confirms another, it means that even more traders are thinking the same way. Check out this article, Convergence Of Signals

    http://www.binaryoptionsthatsuck.com...inary-options/

  11. #10
    Senior Member Lelyz9's Avatar
    Quote Originally Posted by ehenderichs View Post
    Started reading Technical Analysis for Dummies and the author makes an interesting statement. Offcourse I am interested in your opinion about this claim.

    Statement: Use technical indicators always with their default values. These are the optimum across several years (decades) of testing AND work across all timeframes.
    In the reading it also states a lot of traders keep tweaking parameters to make the best possible fit with past price action. But this holds no guarantees for the future.

    Very curious about your opinion.
    My opinion, it's best to try/prove it ourselves. Others' truth is not always our truth. Although, sometimes it is.
    There's a lot of technical indicators, and I believe it's the tweaking result from the previous "indicators" (the price itself is the indicator too) that give newer or better outcomes.

    Maybe someday, you could develop a new technical indicator too from tweaking what you know/test, and put a unique name on it. If many found it useful, and it could give more accurate/helpful result, then it could be widely used. Whether the parameters you chose as the default setting came from your highly optimized result or not, from short range of historical data tested or not, with all markets/assets applied or not, nobody knew except you as the founder. That's the reason, it is widely opened for tweaking and testing.

    Asking questions to know others' truth are great. And it's the greatest if we could find our own truth by testing it ourselves with calculated/acceptable risk. Everyone is different, that makes everyone unique. You are you, know yourself, that's the key to many great achievements. Just my opinion
    There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle - Albert Einstein. Hidden Content

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