Registered User
Joined: 11/20/2006
Posts: 2
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If I had to choose 2 bfest indictors for: 1. finding possible longs and 2. finding possible shorts, what would they be? And what would their parameters be?
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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We trainers cannot give settings, interpretation or investment advice. I'll move this topic to the Stock and Market Talk forum where other traders are more likely to see it and comment.
- Craig
Here to Help!
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Registered User
Joined: 10/26/2005
Posts: 238
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Everyone will have a different answer for this question. AB
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Registered User
Joined: 1/12/2006
Posts: 296
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It's your money. It is up to you to review/understand the functionalities of indicators, such as the special Worden indicators (BOP, TSV, MS) and the common indicators such as RSI, MACD, Stochastic, Moving Averages, etc.
Review the many training videos.
Review other areas within this website, the questions asked by members, along with answers provided by Worden Trainers and others.
Develop your own plan to trade, formalizing your desired PCF's and Scans.
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Registered User
Joined: 12/19/2004
Posts: 457
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I suspect you are a new user, but this is something you need to think about.
What makes you think there is some magical number that, when plugged into an indicator, will make you money by following it?
Furthermore, what makes you think that, if such a number existed, someone here would be willing to share it for free?
Although technical analysis involves numbers, charts, and calculations, the underlying theme of technical analysis is attempting to understand the motivations of others by studying a record of their actions via price, volume, and breadth.
All other indicators are derived from these pieces of data.
Direct your attention to trying to figure out what other traders have done, are are likely to do, based on what you see in the charts.
That is much more useful than dreaming of some magic number to plug into an indicator in the hope it will be a "holy grail" to market profits.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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I know how it feels to be new to trading. And every one here is correct, there is no true blue a 100% answer to your question. You do need a place to start however and let me give you some basics that have worked for me in the past...
Try these basic set-ups
Relative strength (Industry) just crossing its 30 day moving average.
TSV 35 crossing the zero line
Price crossing above its 60 day moving average
Now this is just a start, do some back testing (on all price ranges) and see what has happened in the past when all three of these conditions happen at the same time.
Check fundamentals make sure the stock is not a dog.. It takes some work on your part (proper money managment, stop loss placement to minimize losses)
Ask questions, papper trade for a while and learn from mistakes.. You will be OK..
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Registered User
Joined: 11/1/2006
Posts: 6
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Hi, I want to chime in here as well because I like what I am reading
I liked what rmr1976 said:
What makes you think there is some magical number that, when plugged into an indicator, will make you money by following it?
These points really hit home for me because I consider myself a new trader
still in the learning process. I wanted to say to you that when one starts playing around with formulas and indicators and backtesting... you are going to find some indicators that seem to hold true and then you will mentally convince yourself that you discovered something that no one else on earth knows. You will then use that formula convinced that you are going to make a ton of money because it is flawless, and you will most likely lose money on the trade. The important thing to learn and realize is different formulas or indicators will work for different investors and investing styles. Your favorite indicator might not mean anything to me or my style of trading or vice versa.
Take APSLL"S last sentence to heart though... "learn from mistakes." I finally discovered the indicators and formulas I like to use by making mistakes that cost me a lot of money. Lose enough money and you will eventually start to learn what the best indicators are for YOU. Next thing you know you will wake up one day and discover you have knowledge of what you are interpreting in the charts, and you will have discipline when it comes time to execute..... furthermore, you will start to have some extra coin in your pocket! 
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Registered User
Joined: 1/28/2005
Posts: 6,049
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My statements assume the trader has a basic understanding of indicator
construction and usage.
1) Typically indicators will bear the brunt of criticism when trading goes bad.
( its much easier to blame the indicators then ourselves)
2) The stock you buy or sell has much more to do with profit than the indicator
you are using.
(we cant expect a dual moving average cross to be profitable on a stock that
has gone from $10 to $10.50 over the past year.
3) Indicators always "work". When you are not making money it is typically
the stock or the market that is not "working".
4) Traders will blame indicators for poor results but typically they will be violating
many rules.
(money management, stop loss, poor stock selection, risk ,emotion)
5) Typically the only parameter we can change on an indicator is its
length.
(with the general rule of thumb that shorter parameters will trade more
frequently than longer parameters)
6) Only after you have defined how you want to trade and what you are looking
for can indicator types and parameters be selected.
(trend/countertrend, buy strength/buy value, hold short-term/ hold long-term)
7) Probably the first indicators a new trader should get familiar with are moving
averages. ( it is the least likely to be misinterpreted stock above=good, stock
below= bad)
Thanks
diceman
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Registered User
Joined: 10/7/2004
Posts: 2,181
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Not to pile on, but here are a few more thoughts that will, hopefully, be of some use to someone:
The 2 best indicators are these:
1st, you have set clear and inviolable goals for your trading accompanied by a plan to achieve these and,
2nd, you have these both in writing and refer to them regularly.
These are success indicators. I am persuaded that all but the most exceptional must know beyond any shadow of a doubt what they want to accomplish and how they are going to do it.
The market winds change with such astounding rapidity that, unless you have these two tools (your goals and plans in writing), you will be tossed to and fro like the waves of the sea. (Pardon my waxing poetic.)
The 2 best indicators are the ones you choose to master; the ones you determine to know better than the voice of your loved ones. When you strive for mastery of a given indicator and refuse to relent, you will eventually achieve just that; mastery. Until then, it will master you; alluring you and deceiving you into one poor trade after another.
Some good points that have helped me (which I learned from others):
1) When you have entered a trade, force it to convince you that you did not make a mistake. If it cannot be so persuasive, watch it like a hawk. Do not trust it. And be ready to divorce yourself from it until it is willing to yield that which you seek...profit.
2) Don't overtrade. A few carefully selected trades, each one mothered and nurtured throughout its matrimony with your capital may serve you better than a wide array of stocks "that looked pretty good".
3) As someone once said to me, "There is no logical reason to hesitate in taking a stop loss. Re-entry is only a commission away."
4) Professional and expert traders take losses.
5) Never risk more than 2% of your account equity on any one trade.
6) Averaging down is like a sinking ship deliberately taking on water.
7) Build up to your full position as the move goes your way.
8) Own a stock before the breakout; pro traders sell to the rest of us on breakouts to test the strength of the trade than buy back below the breakout point...just about where you set your stop loss when you buy the breakout (ever wonder why you keep getting stopped out on breakout buys?).
9) Embrace preserving your capital and not your opinion.
10) Always know how much risk you are willing to take on any trade.
Remember the words of the Old Testament prophet, Elijah, "I am not better than my fathers." Don't think it will all be different for you, learn from others.
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Registered User
Joined: 11/30/2006
Posts: 11
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are there any kinds of track records with different indicators, etc that anyone can point to for the different indicators
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Registered User
Joined: 1/28/2005
Posts: 6,049
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thausner
Realize that indicator track records will be determined by:
Stocks traded
Time-frames
Market conditions
--------------------------------------------------------------------------------------
The typical goal of indicator analysis is to determine parameters
that are robust. (parameters that tend to work most of the time)
Thanks
diceman
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Registered User
Joined: 12/7/2004
Posts: 393
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Nearlygold, don't start out investing in junk companies with poor balance sheets and not making any profits,no matter how enticing the chart pattern because you probably wont't be psychologically or technically savvy enough to sell out before it drops. 
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Registered User
Joined: 11/30/2006
Posts: 11
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other than andrew lo, who else has done research on technical indicators to indicate that they can be reliably predictive.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Arthur Merrill for one.
Just for the record. I don't consider the goal of indicators to be sure things.
Trading is about batting averages. Every day trading and economic conditions
are different. To me a stock with good indicators is like a stock with good
earnings. You cant guarantee it will go up but its better than having "bad"
numbers.
The goal in trading is not to be correct. The goal is to make more money
when you are correct. Many studies have show losing systems can
be turned into winning systems with proper money management.
When trading takes place. All parameters must be on the table for
credit/blame.
Knowledge
Emotions
Timeframe
Indicators
Stock selection
Money management
Risk control
Market conditions
Trader discipline
Thanks
diceman
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Registered User
Joined: 10/7/2004
Posts: 264
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Nearlygold,
The two best indicators are price and price.
Save yourself a lot of time, money and heartache. Focus on price. For longs, buy at support. For shorts, sell at resistance. Look at charts on the following stocks.
Longs -- at or near support:
ADP
AMZN
MAT
MNST
TJX
Shorts -- at or near resistence:
ADM
CC
T
See if you can determine the levels and watch how they react. Good luck.
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Registered User
Joined: 11/23/2006
Posts: 22
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tobydad , that is one heck of a post. Very well written packed with lot of deep knowledge.
Best to you
---Radhe
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Registered User
Joined: 2/19/2005
Posts: 38
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I personally liked
7) Probably the first indicators a new trader should get familiar with are moving
averages. ( it is the least likely to be misinterpreted stock above=good, stock
below= bad)
from diceman. This means Moving Averages, MACD, Stochastics, etc., anything that deals with the moving averages of price.
Being relatively new to trading at the young robust age of 46, I suggest to stick to the tried and true Dow 30 for all your trades until you know how the mechanics of trading works. Paper trade your 'system' mechanically if you can. Track it as if it were real. Articulate (i.e., document) your trading philosophy and give it a good test. Backtest on the stocks you are going to be trading in. Makes no sense to backtest on the NASDAQ 100 if you are trading Dow 30's - it's a different pool of stocks.
Great thread!
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