Busy Trading Week
March 1, 2006 by Trader Rich
I’ve been keeping a close eye on the charts this week. I have never quite felt out of the market whether I’m studying the charts or thinking about what might happen next. While this can be mentally draining, I feel like it is necessary for my training.
I’ve kept the indicators on my chart quite busy this week as they must constantly dodge each other on the screen. Yes, I still have too many indicators yet I don’t feel like any of them should be taken away at this point in time. I am using the following indicators this week:
1. Ichimoku - I love this indicator. I’m still learning to use it. Ichimoku actually means "one glance cloud chart." I’ve found it very useful for support/resistance confirmation. In addition, the current trend can be determined in a glance.
2. Trend Lines - Where would any of us be without these
3. EMA’s - 21 EMA Wave, 8 EMA, and 50 EMA
4. Bandwidth - Similar to the squeeze. This indicator is used to indicate volatility or lack thereof
5. RMOM - An indicator that I developed that uses MACD histogram values to compute whether the existing MACD value is greater than or less than the last up or down segment
6. RSI (7) - Relative Strength Index (7 period)
7. Directional Movement Index
8. MACD(12,26,4)
9. Pivot Point Oscillator - An indicator that I developed that I find quite useful now that I made modifications to it last night. I now paint the pivot point values directly on the indicator. This saves having to plot pivot lines on the price chart. Using the 15 minute charts can indicate trend nicely. See the indicator below:
Popularity: 6%
Loading ...
I like the Ichimoku too. It tells me a lot at a glance, the first indicator my eye naturally goes to. Trend indicator: in addition to trend, support and resistance are very important considerations, and Ichimoku is helpful in that regard.
On another topic, timing of the trade is very important. Right now markets are eerily quiet (Asian), doubtles waiting for some news. Alerts in place, I’ll stand aside until I see some volatility.
Greg, I agree. Market is asleep. Nothing going on tonight nor does it seem anything will get going. Do you just use ichimoku or other indicators along side? I just started using it. If your interested, take a look at Mizuho Corporate Bank Technical Analysis. They use ichimoku in a lot of their analysis.
http://www.mizuho-cb.co.uk/TresInternet/
I’m still experimenting with a lot of diffeent indicators. Unfortunately I’m not proficient enough with any of them to determine wether I need to keep them on my charts or not.
I checked out the Mizuho site and I like their analysis. Do you have any links or a good book that discusses the “cloud” in more depth?
Helpful information on Ichimoku:
http://www.metaquotes.net/techanalysis/indicators/ichimoku
http://www.investopedia.com/articles/technical/04/072104.asp “Despite its success, the Ichimoku chart still has some drawbacks.”
http://www.fxstreet.com/education/a30.asp
http://www.forexdealer.net/help/ichm_hlp.htm
Hi Rich: I don’t know if you received my e-mail reply to your query, so here it is in a nutshell (by the way, did anyone catch GBP going down this morning (pdt)? Ichimoku gave a me a tip, as price fell through resistance line at top of cloud, then through cloud support and lower. Of course other indicators helped too, but I like the pictorial feel of Icheimoku (and Gann). Indicators I’m presently using:
15 min chart: gann fan & stochastics
1hr chart: Ichimoku and stochastics
daily chart: Ichimoku and MACD
You’ll not that each chart is simple, uncluttered. In addition to whatever info I get from available sources about the indicators, I do my own study, i.e. what am I seeing on the screen? I find trading as much an art as a science, i.e. I have to be flexible, not locked in to any one indicator as if it’s the holy grail. That said, I’ve always relied on stochastics for overbought/oversold feel. Even then, is the trend (short term or whatever) REALLY overbought/oversold? That is the question.
[u] [/u][u] [/u]:([u] [/u]
Thanks, those links are great.
Yes, thanks for the links. I’ve read a little about Gann but haven’t utilized them whatsoever. I probably should check them out. As far as the ichimoku is concerned, I cannot find anything really of substance regarding this study. I know it’s used extensively for analyzing the USD/JPY or JPY pairs. I haven’t been able to find a book or anything on it. Maybe the simplicity of the indicator is the reason for this and a book just couldn’t be written due to lack of content???
Hi Rich. There are no books on Ichimoku, leaving the door open for someone to write one. The articles give hints and brief how to, which was enough for me along with my own insights. Thus, as I wrote, my question is, “What am I seeing on the screen?” — in relation to cloud, tenkan-sen, kijun-sen, the cloud being the key for me overall. One trader said you should not trade when price is in the cloud, wait til it pops through resistance at top or support at bottom, which is what I did early morning with GBP/USD (taking my other indicators into consideration). I used the hourly chart to make my decision. Rode price down and then back up, getting out just now @ 7508. Sometimes I will trade if price is in the cloud, i.e if I’m sure where the direction is headed. But usually not.
Excellent insight I just hope it isn’t another indicator that I manage to use incorrectly
Thanks also for the Mizho Bank address. Yes, Gann is worth a look.
Two books worth their time: Market Wizards, and The New Market Wizards. One of the traders interviewed made the observaton that on any given day trading is probably luck, but if the trader is consistently winning over time, it’s not luck. Another trader said the whole purpose of entering a trade was to preserve capital (he has never had a losing month.)