This is arguably the biggest waste of time in my early trading years. I was obsessed with trying every indicator and combination known to man. I assumed there was something better out there and something that would work all the time and my life would be so simple all I would have to do is follow indicator X when it said buy and follow indicator X when it said sell. Unfortunately, I am still searching for indicator X. On this part of the journey I learned a lot and I can almost with certainty tell you that there is NO indicator X. It does not exist. There might be some indicator x but there is no indicator X if you get my drift.
The first thing I learned down this path was that there are a lot of scumbag indicator salesman, snake oil mo-fo’s out there. So many websites and blogs claiming their indicator captures some market phenomena and if you just follow it you can have a 90% win rate or make substantial ROI in short periods of time. This should be the first red flag but when you are new it is believable especially with minimal visuals.
In reality, probably 70% of these are absolute garbage where the vendor has cherry picked a handful of excellent examples but there is no value in the signal itself. These indicators are actually worse than the traditional technical indicators (MACD, RSI, Stochastics, Moving Averages) because at least the traditional indicators have cohorts of fanatics that play into a semi self-fulfilling prophecy.
Then another 25% of the indicators for sale out there are slightly better than the traditional technical indicators but only barely. These indicators only work in certain market conditions but the vendors are too lazy and sleazy to put in actual effort to refine them. So they’re hardly useful but when they’re right, boy they work! I now believe there is actually a lot more value in these because if you put in the work you can refine these to where they *could* be potentially very powerful tools to add to your arsenal and often overlooked by other purchasers and the vendor themselves. I currently use two indicators I licensed but originally found useless. Now that they are refined and improved they act as part of my core strategy.
Finally, there is about 5% of the indicators I have come across (maybe even less!) that are solid and created by real traders. These guys typically do not typically sell their work and if they do it is largely done at substantial prices not feasible for part-timers and beginners. You can tell who these vendors are because they share ACTUAL statistics on their signals and not just a handful of cherry picked performance numbers or beautiful charts. Honestly the less charts the better I think.
I have also found that this 25-30% of ‘upper echelon’ vendors typically stray away from using straight price action to derive their indicators. A lot will still use some element in price as tourist traders will scream ‘price is the only thing that matters’ which is 100% false. I found a lot of day trading indicators that really do well taking into account market breadth and internals, however I found myself doing less and less day trading as I get closer to my goal of trading full-time. My splits from 2017 were disastrous and day and swing were not even close as day trading was negative and swing would have got me to my goal alone. Some lessons are painful I suppose.
There are no magical indicators. Obviously. Even the 5% of good ones that you have to pay up for require you to build a set of rules around them to really extract their full value. The best vendors know this. They’re smart and obviously keep the BEST stuff for themselves and sell us the BES stuff keeping T for themselves. If you can find the T you can be in business. I have found it best to combine multiple vendors indicators as some capture things differently then when combined work quite well. The other tidbit I have found helpful is developing my own but that has been arduous as I do not have any prior programming skills and am only starting to learn TradeStation’s Easy Language at a very simple level.