​Indicators & Trading Systems

Indicators point towards probable market direction but do not trade the market. Trading systems do trade the market. That is what is wrong with them. Indicators elicit emotional responses that require no action without price action confirmation. Trading systems elicit basically non-intellectual responses that demand trading action.

Instead of looking at what's really happening in the market by carefully studying a price chart, people listen to a line of garbage such as the following:

"The stochastic D line, used like an RSI line, above 70 is usually the top of a short term rally and below 30 is the bottom of a short term sell off. If the ADX line is still rising, a short term trend should continue. Type II stochastic crossovers occur as the market moves to new highs after the faster K line crosses over the D line, another excellent trend continuation indicator."

Where's my shovel? I smell something that usually comes from a horse!!

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