People get caught up thinking that indicators are “it”. They think indicators are all they need. First and foremost you need a trading system that answers the 5 questions presented in Chapter 10 of the book Trend Following. The list below may have some indicators that are useful in the context of answering the 5 questions that make up a complete trading system, but used alone these indicators are useless.
More on indicators.
More on why entry/exit is not enough.
Full Name | Description |
+100/-100 Crossover | This is a classic interpretation of CCI. Crossings from above +100 to the downside constitute a short, and crossings from below -100 to the upside constitute a long. The period used for CCI and crossover levels can be optimized. |
Commodity Channel Index Divergence | Draws CCI indicator, then the Divergence indicator pivot point is used to isolate. |
Commodity Channel Index Fibonnaci Peaks | Plot 8, 13, and 21- Period oscillators on top of one another. Confirms the existence of peaks (or valleys) conforming to cycles in all three time frames. |
Commodity Channel Index Peaks | Indicator that measures overbought vs. oversold levels by virtue of today’s price distance from the statistical mean price. |
Chaikin Level Divergence | Draw the Chaikin Oscillator. The divergence pivot point method is used to identify divergence from a prior pivot point of the oscillator. |
Chaikin Level Peaks | The Chaikin Oscillator rises when prices advance on higher volume, and goes negative on price declines on high volume. A reversal in the indicator indicates that the current trend in accumulation or distribution could be reversing. |
Candle Pattern: Belt Hold | Pattern formed by a range which extends in the direction of the close. A Bearish Belt Hold exists when the High equals the Open and the Low is below the close. Similarly for the Bullish Belt Hold. |
Candle Pattern: Counter Attack | Occurs when the market reverses direction violently to arrive at the same valuation as a prior period. |
Candle Pattern: Doji Star | Occurs when the closing price equals the open. |
Candle Pattern: Engulfing Line | Occurs when today’s range encloses or engulfs the prior day?s range, thereby indicating great market strength in the direction of today?s close. |
Candle Pattern: Harami | Just the opposite of an engulfing line; yesterday’s body engulfs today’s, with opposite color for the two. |
Candle Pattern: Hammer/Hanging Man | The Hammer pattern is formed by a short body at the top of a long tail. They indicate indecision in the direction of the trend. A solid hammer which occurs at the end of an uptrend is called a Hanging Man. This type of Hammer indicates the market?s propensity to sell off sharply. |
Candle Pattern: Inverted Hammer. | Just the opposite of Hammers; a small body occurs at the bottom of a long tail. |
Candle Pattern: Morning/Evening Star | A Morning Star is formed when a small body is located between two other bodies so that it appears below (or above) the other two. An Evening Star generates a sell signal when a small body is located above two surrounding candles. |
Candle Pattern: Piercing Line/Dark Cloud | Occurs when today’s candle pierces the range of the prior day, in the opposite direction. The Bearish case is also called a Dark Cloud Cover. |
+DI/-DI Crossover | Directional Movement comprises ADX, and has two components, +DI to measure movement to the upside, and -DI, for the opposite. When these two lines cross each other, the market is typically moving from one trend direction to the other. The period for DMI is optimizable. |
Kirshenbaum Band Crossover | Measures market volatility using standard error of linear regression lines of the close. The effect is that they measure the volatility around the current trend. |
MACD Divergence | Looks for divergence between the MACD line and price. This divergence is measured using the pivot point algorithm. |
MACD Crossover | The MACD is constructed by plotting the difference between a 12-period exponential moving average and a 26-period moving average. A third moving average (the trigger line) generates trading signals when the MACD line crosses the trigger , in the direction of MACD. |
Money Flow RSI Breakout | This indicator basically measures the amount of money flowing in or out of a particular stock. When Money Flow moves through zero, it is a sign that a given security is being accumulated or distributed. A separate moving average is provided to smooth the swings. The period used for MFR and the moving average period are both optimizable. |
Money Flow RSI Divergence | Divergence, applied to Money Flow RSI. The system trades when MFR diverges from price. |
Momentum Peaks | Momentum measures the amount a security’s price has changed over the past p periods. This system uses the peak signal method. |
Two Moving Average Crossovers | The faster or shorter-term moving average will rise above a longer-term one, thus giving rise to a system that is in the market on the side of the faster average. |
Price Rate of Change Crossover | Expresses the relative price movement as a percentage. |
ROC +6/-6 Crossover | A classic +6%/-6% crossover system, which trades when the oscillator moves through +6% to the downside (short) and -6% to the upside (long). The period for ROC and the percentage level can both be optimized. |
RSI +70/+30 Crossover | The Relative Strength oscillator (RSI), as defined by Welles Wilder, using a classic crossover interpretation. The system trades when RSI crosses through +30 to the upside (long) and +70 to the downside (short). The levels and periods for the RSI calculation can be optimized. |
Relative Strength Index Divergence | Divergence trading signals occur when an indicator is sloping away, or diverging from the price trend. |
Relative Strength Index Peaks | Based on the notion of comparing up days with down days, according to the theory that overbought levels follow a disproportionate number of periods in which the market advanced, whereas oversold levels generally occur after the market has declined for a significant number of periods. |
STO +80/+20 Crossover | This is the classic Stochastics system which was included in our original systems for MetaStock. The system trades when Stochastics crosses +80 to the downside (short) and +20 to the upside (long). All parameters, including levels, %K and %D periods can be optimized. |
Stochastic Divergence | The stochastics plot is drawn, and then divergence is measured using the indicator pivot point algorithm. |
STO Classic %D | Moving Average Ts when the %D line crosses the %K line above given level (short) or below a given level long). Another classic interpretation of stochastics. |
Stochastic Peaks | Stochastics measures the relative position of today?s close to the range of price action over the past p periods, and are based on the observation that price will typically extend to the end of a range before reversing. |
TRIX Divergence | Divergence on the TRIX (Triple Exponential Moving Average) plot using the pivot point algorithm. |
TRIX Momentum Fibonnaci Peaks | The 8-period, 13-period, 21-period TRIX momentum oscillators are used to arrive at the composite indicator. |
TRIX Momentum Peaks | Yesterday?s value of TRIX is subtracted from today?s value to obtain a momentum curve which gives early signals. |
Volume Accumulation Percent Breakout | Measures relative change in accumulation and distribution to detect places where the market is changing its perception about a security by taking a more active role in buying and selling it, relative to the immediate preceding time period. |
Volume Accumulation Percent Band Crossover | A move above the threshold occurs at the same w/ time as price crosses a trading band. |
Volume Accumulation Percent Divergence | The volume accumulation percent plot is drawn, and then divergence is measured using the indicator pivot point algorithm. |
Volume Climax | System that attempts to identify situations in which prices reverse in the opposite direction as volume declines. |
WIL %R -20/-80 | William?s %R oscillator, with classic crossover Crossover. The system trades (long) when William?s %R crosses -80 to the upside, and short when the oscillator crosses -20 to the downside. The values for period and crossover levels are both optimizable in this system. |
Williams %R Divergence | Williams %R ( an inverted, nonsmoothed Stochastic oscillator) plot is drawn and then divergence is measured using the pivot point algorithm. |
Williams %R Peaks | Turning points of the Williams %R are determined. |
More info here.