Title: TA Tip (2)
Hc - March 6, 2005 07:04 AM (GMT)
TA Tips (2)
Beside using inverted scale charts, one should not under-estimate the usefulness of a empty price charts.
Anyone who touches on TA, will surely come across hundreds of indicators. With the readily availability of PC, TA softwares and data, putting many indicators onto the chart is so easy. So easy that one can carried away the putting more indicator then one required.
I am not saying that indicators are useless, but wish to highlight here a pitfall when using indicators. Indicators, are just indicators. When we buy and sell, we don't buy and sell at indicator's value; we buy and sell at a price. That is to say the price has a absolute impact on the profit and loss, not indicators.
Next, too many indicators on the same chart may blind our sight as to what the price chart is trying to tell us. With all previously plotted trend lines & indicators in place, one tends to fall back to the previous observation and conclusion, thus overlooking the changes in the price chart due to new entry of data. This can be very dangerous as we often realize the previous observation is wrong too late.
So please start over with a fresh price chart frequently, be it bar chart or candlesticks, so as to put a check on your existing view/assumption.
Beside using inverted scale charts, one should not under-estimate the usefulness of a empty price charts.
Anyone who touches on TA, will surely come across hundreds of indicators. With the readily availability of PC, TA softwares and data, putting many indicators onto the chart is so easy. So easy that one can carried away the putting more indicator then one required.
I am not saying that indicators are useless, but wish to highlight here a pitfall when using indicators. Indicators, are just indicators. When we buy and sell, we don't buy and sell at indicator's value; we buy and sell at a price. That is to say the price has a absolute impact on the profit and loss, not indicators.
Next, too many indicators on the same chart may blind our sight as to what the price chart is trying to tell us. With all previously plotted trend lines & indicators in place, one tends to fall back to the previous observation and conclusion, thus overlooking the changes in the price chart due to new entry of data. This can be very dangerous as we often realize the previous observation is wrong too late.
So please start over with a fresh price chart frequently, be it bar chart or candlesticks, so as to put a check on your existing view/assumption.
Hc - March 6, 2005 03:18 PM (GMT)
Here is an add on tips for Metastock users:
If you wish to see a new clean price chart, but still wish to keep the existing studies (indicators, trend lines etc), instead of deleting all the studies and then later put back, you can create a new clean price chart with the use of templates.
Here is how:
1. Create a the new price chart the way you wish to see it
2. The click [File], [Save As] give it a name (say "Plain Price Chart") and save as template
3. To use this template in any other charts, open that chart, right click on the chart, [Apply Templates...] and choose the name of template ("Plain Price Chart") that you had given, then [Open] and done.
If you use a version of Metastock (mine is version 8) that allow you to customize tool bars, you can add that templates on your tool bars by: right click, [Custom Tool bars Properties...], [New], [Browse] and point to the template you just created, give it a name and description, choose an icon and done. From here on, you "Plain Price Chart" is just one click away.
If you wish to see a new clean price chart, but still wish to keep the existing studies (indicators, trend lines etc), instead of deleting all the studies and then later put back, you can create a new clean price chart with the use of templates.
Here is how:
1. Create a the new price chart the way you wish to see it
2. The click [File], [Save As] give it a name (say "Plain Price Chart") and save as template
3. To use this template in any other charts, open that chart, right click on the chart, [Apply Templates...] and choose the name of template ("Plain Price Chart") that you had given, then [Open] and done.
If you use a version of Metastock (mine is version 8) that allow you to customize tool bars, you can add that templates on your tool bars by: right click, [Custom Tool bars Properties...], [New], [Browse] and point to the template you just created, give it a name and description, choose an icon and done. From here on, you "Plain Price Chart" is just one click away.