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Indicators Are For Secondary Analysis

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July 21, 2010 – Comments (0)

Let's face it...there are tons, and I mean TONS of indicators one can use to trade with. Some of them claim to encompass everything you need in order to make dependable trading decisions - but let me just tell you right off the bat, that such bold claims is complete horse manure. Indicators, in an of themselves, are nothing more than derivatives of price and volume - that is something you MUST realize and that is why I am always pounding on the fact that price and volume should be what you conduct your primary analysis on, and any indicators you use thereafter should only be used in conjunction to support or expose divergences in price and volume.

I have actually met people in the past that brag to me about how they actually ignore price or volume or BOTH all together and trade simply off of their indicators. Frankly, that is the craziest thing I have ever heard. Never in my wildest dreams could I ever support or encourage someone to try doing such a thing. You are just setting yourself up for disaster.

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