Interesting Initials

http://www.forexfactory.com/showthread.php?p=5975854#post5975854

Stringfx says that my abbreviation itself is support resistance.  That is a good one!  I did not notice that I have such a interesting screen name.  I'll put that in my signature.

TA Indicators

From Arthur - Snowrider, As you know, I have only started to read your posts recently, and am glad to learn that you do not use indicators. I am in a love-hate situation with indicators. I would like to get rid of them completely, however, they nevertheless give me some indication, even though, at times, they do not work at all, but which I have prepared for. Would you be happy to tell me your view point of indicators, and why you dislike them?  And how would you be able to notice divergence(s)?

I did started from using TA indicators, and I have played all indicators inside out before throwing them away.  I understand and know them too well so that I won't use them.  Given a TA indicator, you can ask yourself some simple questions about that indicator:

1. Do you know how to use it?
2. Do you know the formula (how it is calculated)?
3. Do you know the idea behind the formula (why it is designed that way)?
4. Do you know what timeframes that indicator work best with what parameter values?

Once you know the formula, have you thought about tweaking it a little bit or create your own formula?  Once you create your own formular (your own TA indicator), you might be wondering what the optimal parameter values for your indicator are?  At that moment, you might want to start playing system trading.  You will then write you own systems and start back-testing historical data.  In the end, you might succeed on that route - system trading.  However, I did not, so I threw away everything and went back to price action/behavior.  Please read more:

System Trading vs Elliott Wave (I, II, and III)

About the question of identifying divergence ... EW has some very good patterns for you to identify the end of a wave.  For example, the Ending Diagonal Triangle pattern will bring your TA indicators to divergence.  You don't need an indicator to tell you that because the chart already told you.

Use MACD and KD% Together

From Liwen - Hi Snowrider, I was looking through the NUGT. My question is 1. did you buy the whole stock price or call option? 2. I am always having some wrong judgement when facing the similar indicator sample like NUGT now, so I want to ask even if MACD is showing positive 0 trend, but the slow/fast KD are in the high value, what make you feel today is a good buy chance? I am kinda confused every time when I see this situation, since when I bet it is down then it goes up, vice versa. Thanks in advance!

About NUGT, I purchased stock instead of its call option.  If you read my post long enough, you will know that I don't use any technical indicator and not even moving averages.  Regarding your using MACD, you need to know what that is!  The idea of using MACD is to follow a trend - a trend that is defined by the MACD's underlying parameterized MAs.  You use the MACD, so you want to be a trend follower.  On the other hand, using KD% is to assume that the market will go back to its mean.  You use KD%, so it makes you to trade against the trend.  The philosophies behind those two indicators contradict each other!  You might want to first define yourself a trend follower or a swing trader.  After that you might want to define in what timeframe you want to follow the trend, and what timeframe you want to trade mean reversion.  Maybe you want to trade by following a longer timeframe's MACD but enter the market only when a lower timeframe's KD% shows you the same direction signal as the that of the longer timeframe's MACD.  Please read more:

Divergence, Overbought, Oversold?
http://perfectew.blogspot.com/2012/05/q_15.html

Mean Reversion
http://perfectew.blogspot.com/2012/05/mean-reversion.html

Wave Count

 

My Trade - 2012-08-W4

I am starting a new thread for the 4th week of August.  All troops target on long term trading.  All percentages are the dollar amount allocations of each troop.  The following lists my positions as of last Friday:

Big Troop:
- IWM 20% (20%-08/08)
- SPY 45% (10%-07/05, 15%-07/06, 10%-07/11, 10%-07/24)
- Cash 35%

SAC Troop:
- XLF 22% (10%-07/30, 12%-07/31)
- QQQ 24% (24%-08/02)
- FAS 8% (8%-08/13)
- NUGT 3% (3%-08/21)
- EDZ 8% (8%-08/22)
- Cash 35%

If you have any question about my trading (long term, short term, stock, or FX/Futures), please PM, and I'll be glad to help!
Q. How to PM?  A. If you are on a forum, you know how to PM me.  If you are on my blog, please put your email address in a comment (once you receive my private email, you can remove your email address from the post.)

My Trade for last week:
http://perfectew.blogspot.com/2012/08/my-trade-2012-08-w3.html

PLEASE JOIN MY BLOG AS A FOLLOWER.  I WILL PRIVATIZE THE BLOG ONCE WE REACH A SIZEABLE NUMBER OF AUDIENCE.  THANKS!