What is your favorite momentum indicator?
Let me know in the comments below.
Lucra® by Mindie Kniss and Sean Stephenson
Success coaching for entrepreneurs and traders, plus online courses on coach training and professional speaker training.
Lucra® by Mindie Kniss and Sean Stephenson
Success coaching for entrepreneurs and traders, plus online courses on coach training and professional speaker training.
Mindie. What I think you’re missing is the divergence in price and the indicator prior to the big price move? I’m not sure I don’t use that indicator. I use a modified stoch.
Thanks KC!
I am not very technically skilled. I am relatively new to the futures market and not doing to well. I simply look at the candles. I am always willing to learn from those who have the knowledge and experience. I will welcome any ideas that the members can share that would help with this topic. Thank you for sharing what you are doing. I have used some of your ideas.
Thanks Ricardo!
Hi, Mindie,
I have used MACD, which is both a momentum and trending and convergence/divergence indicator, a kinda jack-of-all-trades indicator. Then there is stochastics, which is more of an oscillator but can also be used for short-term momentum. Then there is RSI, which is also an oscillator but can hint at increasing momentum when it is at/above 70 or at/below 30 on the scale.
All three indicators I mention above are of course the most popular indicators being used and they each have many different ways to be used. Why many different ways? Because there is always the bigger context in which they are being used, i.e., the overall trend of the Price Chart.
Yep, your first assumption is better, that is, looking at the Price Chart, or said another way, the actual CANDLESTICKS on the Price Chart. Candlesticks are showing what is happening with momentum NOW. Whereas, all indicators (and there are probably over 300 indicators out there), they all calculate their readings based on what? BASED on the open/close, highs/lows of the candlesticks:
That is why ALL INDICATORS are LAGGING INDICATORS, therefore making the Price Chart itself the LEADING INDICATOR.
The problem with candlesticks, though, is they must be used in groups of at least three to ten or more. Why? Because one candlestick can be deceiving (a head-fake), if used only by itself.
Yep, a candlestick reader must use NOT INDIVIDUAL CANDLESTICKS but many in a row. Why? Because we are looking for PATTERNS.
Back to the 300 or so indicators, my advice is: No matter what indicator you are using, view it in the PATTERNS that it forms over the greater context of segments of time, which, for a DAY TRADER, good segments of time encompasses at least 4 hours to 24 hours look-back from where the market is at any given minute.
Looking back over this period of time one should ask the question: What is the overall, prolonged pattern of whatever indicator is being used?
With time, one can see the indicator PATTERNS that repeat themselves and that bring about the desired results in one’s trading goals.
But still, the Candlesticks and the PATTERNS they form on the Price Chart can be the best LEADING MOMENTUM INDICATOR, especially across multiple time periods that agree with each other.
Sorry to be so wordy, Mindie.
James
P.S. I have never used the Momentum Indicator you speak of in your Vlog posting.
Hey James, yes, I’ve used the MACD as well. Still on the hunt for the one I like best. 😀