Browse > Home / SP Futures / Trading “Indicators”, MACD and Stochastic Debate

Trading “Indicators”, MACD and Stochastic Debate

May 22, 2008 1:40 AM

I would guess that at least 90%, probably over 95%, of all traders/investors that are not professionals look at a myriad of indicators. The most common are the MACD and Stochastic. There are at least 25 or 30 so called indicators that allegedly assist people in trading and investing.

If you notice, most of my calls have been correct. Even when not correct, I provide an exit number. Do I look at MACD? No. Stoch? No. Bollinger Bands? No. Any other of the zillion so called indicators? No.

Think of it this way. Here is a fundamental question about the market. What causes the MACD or Stochastic to “cross” long or short? The professionals were in the trade LONG before, and these indicators represent what they have been doing far after the fact. Essentially, they allow you to try and piggyback their trades later on.

Today should provide some clarirty to this issue. I said near the pre-fed lows today “1407.25 needs to hold here”….then said ”I am long 1408.50 to see if we are going to hold it” and it rallied 5 points. Was the MACD crossed big time short at 1408.50 on the almost all the charts? Almost no question. Did I care? Not in the least. I didn’t care if it was crossed short, pointed straight up, down, sideways, or in the shape of a flag or continent. We had to clear 1407.25 and I was long above it. Period.

Damn I give away a lot of information for free…. I think I need to set up a donation box…a VERY large donation box….

Written by Tom@StockBlade.com · Filed Under SP Futures 

Comments

Got something to say?