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Hi Lionel,
I cannot comment on your first point as I honestly didn't know that a re-print was on its way.
I do, however, agree fully with your second point; John Bollinger, in his book "Bollinger on Bollinger Bands" warns on this - the sycophancy trap, he calls it.
In my opinion, people forget that indicators are just that - a tool to indicate and support price, not the other way round; trade what you see, not what you want to see.
By focusing on price, you'll do the former; focuse on the indicator and...!
Quite frankly, I am not surprised that this happens, with all the commercial interests continually bombarding with their latest newsletter, books, etc...; somebody just starting on trading can easily lose sight, looking for the Holly Grail in indicators, when anybody with a bit of experience knows that this is just not so.
I fell in this trap, too.
I suggest to anybody who read this to forget about the latest fad, concentrate on a few selected indicators, ie., the RSI, to name just one; learn to work with them, design a methodology, back test it, apply sound money management principles (position size, stop loss levels, etc...) and stick to it.
And that's all, folks!
Eduardo
Lionel Issen <lissen@xxxxxxxxxxxxx> wrote:
Eduardo:
I guess the book is back in print. There was said to be a new edition coming
out, is this it?
In the book "The New Technical Trader" I think it said that all price only
based indicators have a high correlation and will therefore give similar
answers.
Regards
Lionel
_____
From: equismetastock@xxxxxxxxxxxxxxx [mailto:equismetastock@xxxxxxxxxxxxxxx]
On Behalf Of Eduardo Gontan Pulgarin
Sent: Tuesday, June 06, 2006 12:04 AM
To: equismetastock@xxxxxxxxxxxxxxx
Subject: RE: [EquisMetaStock Group] Similar Indicators
Hi Lionel,
It's being sold on Amazon.com for US$34.95; there are two copies left, so
you may want to rush!
Eduardo.
Lionel Issen <lissen@xxxxxxxxxx <mailto:lissen%40sbcglobal.net> net> wrote:
Thanks for these titles, I'll take a look.
Hayden's book is out of print. I haven't been able to find a copy for some
time.
Lionel
_____
From: equismetastock@ <mailto:equismetastock%40yahoogroups.com>
yahoogroups.com [mailto:equismetastock@
<mailto:equismetastock%40yahoogroups.com> yahoogroups.com]
On Behalf Of Eduardo Gontan Pulgarin
Sent: Monday, June 05, 2006 10:33 PM
To: equismetastock@ <mailto:equismetastock%40yahoogroups.com>
yahoogroups.com
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@xxxxxx <mailto:drauosi%40yahoo.com> com> 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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