Saturday, July 26, 2014

Custom Indicator - Should I pay?

To answer this question, I have to ask another question, Is there a holy grail indicator?

Yes / No, the custom indicator is a rip off. This is subjective. Because, understanding the concept is the key. Someone creating a successful indicator for them, can be based on his strategy. Does not mean can be a a profitable indicator for you.

For example, (Please understand i am not against anyone coding an indicator, All I am saying is, don't hunt for holy grail indicators).

Simpleroptions, Thinkscripter and many others are selling indicators. Some explains the concept and how it works. Without understanding the indicators don't buy them.

Steps to consider before buying an indicator.
  1. Most Importantly, How does it work? What is the basis of any indicator?
  2. The Math behind the basis and the indicator you are purchasing.
  3. Different strategies that can be used on the indicator.
  4. Can you understand the strategy?
  5. Did you backtest the indicator yourself?
Lets start with an example.

So this is an indicator that is priced for a little less than $1500 and discounted for $500. 

What are ABC wave reading? It measuring the short term trend, medium term trend and long term trend. 

Now the second question is, How else can I measure this? 
  1. MACD (short term, medium term and long term). 
  2. Moving averages (short term, medium term and long term) are some simpler ways to do this. 
or you can use a linear regression on price chart for different indicator. 

So there are many other ways to perform the same. 

Now, you know there are many other ways to do this. 

The next question is, do you need this?

This is just an example. It uses the same EMA, to create a similar wave patter, Its not exactly same. But the concept is same. 

So you can free the price chart for other purpose. and utilize the price chart for other purposes. 

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