What's Right for the Goose...
The debate rages on. What’s the best indicator to use for trading futures? The answer is, there isn’t one. Are some better than others? For sure. It also greatly depends on what products you’re trading. If you’re tracking markets that rely heavily on fundamental factors for volatility, such as grains and meats, you would probably want to look at more time and price based indicators. If more technically reliant markets are your thing, like stocks and bonds, then pivots and oscillators might be more in your wheelhouse.
The “Holy Grail” basket of indicators just doesn’t exist. Every trader is unique, and we all see something different when we look at the markets. This would lead one to presume that even though we’re all looking at the same oscillator or point-and-figure chart, it’s more than possible we all have a different opinion of what that information could mean.
Don’t get discouraged, there is an edge!
We all know what we want out of trading. To get what we want out of the market, we have to have a game plan. A good trading game plan starts with knowing yourself. Stepping back and taking an honest self-assessment of what type of trader you are is a great first step in identifying what indicators will best match your style. After that you can begin to build your own suite of custom signals. A few basic questions you can ask yourself are:
- What markets do I want to trade?
- Am I scalping or swing trading?
- Am I spreading or trading outrights?
- Or simply, am I bullish or bearish?
Some people can get away with scalping around short term moving averages, but the vast majority of us can’t. Do your research on what variables are used to produce an indicator, then determine whether or not those variables are an actionable factor in trading your particular market. That’s the best advice we can give.
In this week’s Coach’s Playbook, Jack, Dan and John give you a quick look at their favorite indicators. Remember, it’s all about what works best for you!
Leave a comment below with your favorite indicator for our next podcast.