Do you use Simple Moving Averages (SMA), Exponential Moving Average (EMA), Moving Average Convergence Divergence (MACD), KDJ Indicator (KDJ), Relative Strength Index (RSI), William %R (W%R), Bias Ratio (BIAS), Bollinger Bands (BOLL), Fast Stochastic Oscillator (FSTO), Slow Stochastic Oscillator (SSTO), Community Channel Index (CCI), Volume Moving Average (VMA), Bollinger Bands, Ichimmoku Clouds, Keltner Channels, Parabolic SAR, Pivot Points, Price Channels, Volume by Price, Volume-weighted average price (VWAP), Zigzag, Accumulation Distrbution Line (ADL), Aroon, Average True Range (ATR), %B Indicators, Commodity Channel Index (CCI), Coppock Curve, Correlation Coefficient, Correlation Coefficient, Chaikin Money Flow, Chaikin Oscilator, Detrended Price Osciliator (DPO), Ease of Movement (EMV), Force Index, Know Sure Thing (KST), Mass Index, Money Flow Index (MFI), Negative Volume Index (NVI), On Balance Volume (OBV), Percentage Price Oscillator (PVO), Stockchart Technical Rank (SCTR), Slop, Standard Deviations, StochRSI, TRIX, Ultimate Oscillator, Vortex Index, William %R, Arm Index, Advance-Decline Line, Advance Decline Volume Line,  Bullish Percent Index, The High-Low Index, McClellan Oscillator, McClellan Summation Index, Net New Highs, Percent Above Moving Average, Put/Call Ratio, Record High % Index, Volatility Indices, or one of the several other thousands of man-made indicators?

Indicators are just that, indicators.

I’ll be the first to say that what you are looking for as a trader is a SLIGHT advantage, but if I was to provide you each of these numbers and an explanation for each of them (which I don’t know 80% of them), it would end in absolute chaos.

Far too often people back into their results.  If you use a handful of these indicators (say 10), odds are one of them will seem to have a very strong correlation to your results, until it doesn’t.

The amount of information overload is crazy. Call me lazy, but I think the people who try to follow all of these indicators are mentally insane.

I’ll stick to my range, P/E, revenues, margins, net incomes, and technical margins. I personally find moving averages to be close to worthless (but that is my opinion). But who knows, as I go down the rabbit hole, maybe I’ll do what most traders do.. find a few indicators I like and become completely closed minded.

All I know is that I’m up for the year a lot and I didn’t need the Force Index Indicator or Know Sure Thing (KST) to get here.

I’ll stick to my guns and my way of approaching a trade.


Filed under: Investing

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