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At 10:23 AM 7/6/98 +0200, you wrote:
>Good morning Rt´s ,
>
>I need a little help from you. I´m running constantly in problems when
>trying to decide which indicators are leading and which are lagging. Could
>you please just list some, so I get a clearer picture of leading and
>lagging (I guess I´m lagging on this)
>
>Thanks in advance - Ulrich
>
Hello Ulrich,
Any indicator which issues a signal AFTER price has moved,
is a lagging indicator. MACD, Stochastic, RSI, Moving Averages
as they are commonly used are lagging.
Leading indicators (attempt to) tell you where prices
will go (or turn/find support/resistance) BEFORE they
get there. Leading indicators are predictive (though not
reliable for mechanical/blind trading). It's fair to say
that leading indicators usually require subjective
human interpretation, which is why novice traders
have difficulty with them.
Examples of leading indicators are Gann, Elliott, Fibonacci,
Astrology, price patterns (such as Triangles, Double-RePo's,
Head-and-shoulders), and price pattern failures (Head-and-shoulder
failure for example) etc.
I use Fibonacci, price-patterns, and price-pattern failures all the time.
For me, trading without leading indicators is like flying an airplane
in fog without instruments.
Combining leading and lagging indicators across multiple
time-frames is very powerful. Leading indicators are valuable
in deciding when to fade a common lagging indicator. For example, you know
that the blind followers of the common Stochastic 25/75 will be
on the wrong side of the market on the first false signal it gives
near major Fibonacci support/resistance (they will drive price
right to a Fib level, where your entry stop is, then they will
be scrambling to reverse just as you are taking a profit)....
Best wishes,
-Neal.
---
DiNapoli Fibonacci techniques -
http://www.fibtrader.com
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