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I do think that certain indicators work but only in a selective sense of the
word. The Ehlers cycle indicators does "predict" tops and bottoms but only
in a trading range. Once we break out of the trading range, the last signal
taken would be in opposite direction of the trend.
For example, let's say you have a trading range where you're able to trade
the top and bottoms effectively. Let's say that the last signal from the
indicator was for a top and you go short. However, it turns out that the
"top" you've just shorted is a breakout to higher highs. So, you're
screwed.
It's very hard to write systems that can trade doing this, much less being
able to absorb the losses time and time again. The indicators for Ehler's
cycle phase was written in a past issue of TASC and maybe posted at the
Omega website. The key to the indicator is that when the slope of the
indicator is constant, you're in a trading range and when the slope becomes
choppy, you're in a trend.
If anyone can tell me how to write a function/system that finds a slope of
an indicator, please let me know. This just might be the last step towards
the Holy Grail. ;-)
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