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<DIV><FONT color=#000000 face="" size=2>Good Morning RTer's,</FONT></DIV>
<DIV><FONT color=#000000 face="" size=2></FONT> </DIV>
<DIV><FONT color=#000000 face="" size=2>In a recent post there was talk about
using a 5,13,34 moving average. Perhaps I am late in the conversation but, I do
not recall the type of MA use. ( Exponential, Regression, Adaptive etc..). Could
you clarify.</FONT></DIV>
<DIV><FONT color=#000000 face="" size=2></FONT> </DIV>
<DIV><FONT color=#000000 face="" size=2>Sincerely,</FONT></DIV>
<DIV><FONT color=#000000 face="" size=2></FONT> </DIV>
<DIV><FONT color=#000000 face="" size=2>Richard J. Chehovin</FONT></DIV>
<DIV><FONT color=#000000 face="" size=2>Galactic FX International,
Inc..</FONT></DIV>
<DIV><FONT color=#000000 face="" size=2>Denver, CO
</FONT></DIV></BODY></HTML>
</x-html>From ???@??? Tue Mar 24 10:33:49 1998
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Date: Tue, 24 Mar 1998 12:49:39 -0000
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From: "Bill Eykyn" <t-bondtrader@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: GEN: All indicators lag, don't they?
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What-O Chaps and Chappeses
This is just to provoke thought, in case the market starts off slowly, with
no reports - following a Larry Williams Oops Day, yesterday!
Question: "Except for price action, don't all indicators lag?" How ever
many cross-overs of how ever many moving averages, or how ever many
oscilators cut the overbought/oversold lines, the fact remains that they all
lag!
At the right hand leading edge, the indicator may look as if it is about to
give you a signal of a trend change, but by the next bar, it may have
changed its mind. It will certainly be right when you look back on it. But
at the precise moment when you need it most - just as you are wanting to put
your money on it! - it is not quite telling you what you really want to
know. Infuriating!
I am a day-trader, so I am, of course, talking about very short time frames.
Perhaps with much longer time frames, like days and weeks, these things
work - at least sufficiently to give you an edge, hopefully! But on a 5
minute chart, a one minute chart, a tick chart, the only indicator is price
action - right in front of your eyes.
This price action works constantly against the support and resistance that
it meets in the market. That sup/res is based wholly on what has happened
previously. The only edge you have (or need?) is the price recognition at
these sup/res levels. After that, it all becomes history...
Now, I have to admit that what I am saying is based only on trading the
Bonds. Perhaps with other markets all the indicators discussed here are
relevant and work and earn you money. Well, earn you more money than when
they cause you to lose money! Or is the truth that they are indicators at
that moment in time and that that moment in time passes, in that moment in
time - goodbye!
But sup/res in the market is there and stays there; the only question is:
will it or won't it hold? The answer comes not from an indicator, but from
the price action and the volume and noise associated with it. In the end it
becomes a pattern recognition process. Give me a two-bar reversal or a deep
down-thrust, etc (and the etc is another story!) against sup/res properly
and previously identified and that will tell me more than any indicator I
have come across yet (and 'yet' no doubt is yet another story!)
Okay, guys, do I hear the jungle drums rumbling...
Indicatingly
Bill
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