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Re: [EquisMetaStock Group] Similar Indicators



PureBytes Links

Trading Reference Links

Drauosi -- Thought this might be of interest to you
www.trading-naked.com/library/Trend_Determination.pdf 

Ram


  ----- Original Message ----- 
  From: Eduardo Gontan Pulgarin 
  To: equismetastock@xxxxxxxxxxxxxxx 
  Sent: Monday, June 05, 2006 11:32 PM
  Subject: Re: [EquisMetaStock Group] Similar Indicators


  Hi drauosi ,

  That I know of, there is no such thing as a leading indicator as that would be a license to print money, that is, whoever had such an indicator would know tomorrow's price...
  The MACD, RSI, et al., are all based on price - some even have price and volume in their construction, but basically all rely on price, and are therefore lagging indicators.
  In the case of the RSI, MACD Histograms, and others, the divergeance they make against the underlying's price may, occasionally (but not always) point to a probable profitable trade - it is all probabilities, you see; there is no real certainty in trading markets, except that , depending on you broker, you may get fleeced or not!
  For what it is worth, here is a book on the RSI; in fact, the best that you'll find on that particular indicator:

  RSI: The Complete Guide,
  by John Hayden,
  Traders Press, Inc.
  ISBN 0-934380-88-0

  John Hayden was Andrew Cardwell's associate; Andrew Cardwell is the most authoritative figure on the RSI - I think that he charges US$2,000 for a two days seminar!
  While we are on the subject of books, read this one - it will take you further in your trading career than any indicator in the world will:

  The Trading Game: Playing by the Numbers to Make Millions
  by Ryan Jones
  John Wiley & Sons, Inc.
  ISBN 0-471-31698-9

  Don't be fooled by the name - it is the best book on money management that I have come across!

  Eduardo.


  drauosi <drauosi@xxxxxxxxx> wrote:
  Hi All,

  I've read many books on techinical analysis that strongly suggest not 
  to use "similar" indicators as confirmation of a buy or sell signal. 
  For example, do not use moving average crossover with a MACD because 
  they both rely on moving averages of the closing prices. Does anybody 
  have a list of indicators that should not be used in this way? I've 
  searched the net but no luck so far.

  I've also found that some "experts" call the RSI a leading indicator 
  and others call it a price following indicator. Can anybody supply me 
  with a list of the common indicators and whether they are leading or 
  price following?

  Many thanks,

  Jeff.

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