Advantages of indicators – My experience

I have always traded with real money, I was never a friend of the demo trade. In my opinion, demo trading is only useful for trying out a new platform or order type, but most traders who successfully trade with demo will fail in real trading, because the emotional burden is quite different. For me personally, demo trading is a waste of time, because in demo trading you fail to train your emotional “skills”, but this is something that everyone can decide for themselves.

Failed, but still made progress

Of course, as a trader, you will eventually end up with moving averages (20/50/200 SMA/EMA) like the oscillators (MACD/RSI/Stochastics) as well as other “fancy and popular indicators” like Bollinger, Keltner etc. I have tried almost all of them and “bought” dozens more on the Internet, both for a fee and free of charge. The goal of this “trial and error” has always been to create the irrepressible will in me to finally “master” trading. My “journey” also led via money flow indicators and market profiles always with the thought of finally being able to “see or hear” what the market is doing or wants to do. To anticipate it: I definitely failed with this attempt, but I still made progress.

Two technical indicators that bring an advantage?

Today I would like to present two indicators that I have “stuck” to and that are used again and again in one of two strategies that I exclusively trade.

These are the Better Trading Indicators by Barry Taylor (emini-watch.com). These indicators work on TradeStation, Multicharts and NinjaTrader and are supposed to bring an advantage. I myself use NinjaTrader and have purchased the bundle of Better ProAM, Better Momentum and Better SineWave, but only use ProAM and Momentum. This one I want to introduce to you:

  1. better ProAM

For Barry, ProAM means “professional and amateur activity” and indicates through different discoloration whether amateurs (yellow) or professionals (blue) are acting. This indicator measures the average trade size and makes absolute sense for me personally. Whether 400 x 1 contract, 200 x 2 contracts and 20 x 10 contracts were traded for 1000 contracts or 4 x 100, 2 x 200 and 1 x 200 makes a big difference. In the first case it will be us (the retail traders) and in the second case it will be the big guys (deep pocket traders).

  1. better momentum

While the “ordinary” momentum indicators show the change in price (Price Action can also be seen in our charts), the Better Momentum measures buying and selling volume. This indicator also shows various signals through various dots (blue, cyan, red, grey, yellow), which are explained in detail on the developer’s page.

In the following I have added two intraday charts, which I use for my own trading, and would like to explain the marked points:

1st chart 40500 Ticks (ES Future)

In the 40500 ticks chart of the E-mini S&P Future I have marked the interesting market situations with small numbers.

Here are the explanations to the chart:

(1) Blue bars = professional activity at the low of the day. For me always “exciting”, because professionals like to act on tops and bottoms and turn the market frequently.

(2) Exhaustion signal Momentum (extreme heavy selling on the bid side)

The indicator is of course not perfect and the market does not turn immediately because large orders come in. Also towards the end many day traders trade and close their positions. As you can see, the market falls another 25 points after professional activity and then turns 50 points.

(3) Professional activtiy at the tops = exciting again. Market falls by 18 points before US open.

(4) Professional activity at the tops is accompanied by an exhaustion signal Momentum (extreme heavy buying on the ask side). Market falls by 45 points.

(5) Professional activity at the bottom, watch out for point 1 = same price level, professionals enter again. The first swing brought about 30 points from bottom to top, but the day becomes a sideways / range day and then explodes upwards.

(6) Professional activity on the tops, market corrected by 18 points, makes new highs (stop fishing) and it goes south (> 50 points).

(7) Just now professional activity at the lows.

(8) Bullish divergence signals on momentum.

II. chart 13500 ticks

(6a) Point 6a is not shown in the first chart (40500 tick) because there is nothing to see. It is the high to the right of point 6, but the indicator shows no professional activity on the 40500 tick bar, while here a lot is shown.

The green box was my personal resistance range, which started quite well on 2 days.

Conclusion on these indicators:

They’re not perfect, but they make sense to me. The most “valuable” indicator for me personally is ProAM, since professional activity to “see” is of great service to me personally as a filter function. For example, Barry Taylor once said: ” I can not imagine to trade without better sine wave.” I have better sine wave, but it just confuses me (or I don’t understand it), I don’t see any benefit in it, so I don’t use it.

Basics:

I believe very strongly that personal belief in his trading method is extremely important. I personally only trade certain zones where I want to buy if the parameters are met and my trading plan allows me to do so. I believe in this from the depth of my heart. I am convinced that everyone must decide for themselves why they believe what and how they trade. As I also mentioned at the beginning, “things” change with increasing experience. I personally noticed that over the years you find your personal “path” and get to know much more about yourself. For example I am not a daytrader and will never be one. I have tried it intensively – also quite disciplined – but never managed to become permanently profitable, let alone happy with daytrading. I have strong professional commitments that also require my attention. Day trading was not for me from the beginning, but I just had to learn. Today I only act position and swing and I am happy and satisfied with it.

Karsten is my first teacher from whom I learned a lot. He is one of the few traders (2 hands full, maybe 3 hands) I have met in the course of my “trading career” who really want to trade and help people. I still remember when I travelled to him in Berlin 11 years ago and traded the S&P together with him 2 times 3 days. It was very instructive with him and I am very grateful for the lessons I was able to learn from him.

Do indicators give you an advantage when trading? Conclusion & my answer:

Yes and no. What good is a good indicator if your strategy is broken, you are undisciplined, you don’t understand risk or money management and you don’t follow your trading plan? Of course nothing.

I still have problems with my discipline in my 12th year. I meditate too little (but again and again), sometimes I let myself be guided by greed (thank God less and less) and sometimes I take out my winners too quickly. All points I am working on and will probably work on until the end of my life / trading.

In addition, the points mentioned were far from being conclusive and complete, there are definitely more points – even outside of trading – that I want to work on. Trading is a marathon and not a sprint, that has to be made clear.

For me personally, price action is absolute king and volume is absolute queen, followed by discipline, money and risk management, trading plan and only then a good strategy based on all the above. If you “have” all this and have found your indicators that help you to make a decision, then in my subjective opinion you have a chance to “survive” = Freedom & Wealth!


Leave a Reply

Your email address will not be published. Required fields are marked *