Price Action vs Indicators

 

Price Action vs Indicators

In the trading world there is an ongoing debate in many circles on whether trading price action alone is best or if technical trading indicators can add value to trading decisions.

Many believe that trading based on price alone is the best way to trade as you are don’t over complicate your decisions with the addition of other indicators. They claim that all you need is price and that indicators are just derivatives of price action. However, they overlook the fact that indicators are just another way to filter, quantify, measure, and express price action. Indicators take nothing away from your ability to see the price action on your chart they just measure it and show you another view.

Another claim is that indicators are lagging. The error in this thinking is that there are leading indicators, both price action and technical indicators are always showing the past not the future. Indicators measure past price action, as each new price is printed on the chart it is in the past. Trading price action using chart patterns is trading the history of the price that created an eventual breakout signal. Both price and indicators are lagging as neither happens in the future.

Many love the simplicity of trading price alone but at times of high volatility it can be easier to trade with technical indicators like moving averages, MACD, or RSI as they will help filter out much of the chop in price action and give less signals than pure price trading. A price action trader may get five false breakout signals of a range while a moving average crossover trader may only get one entry signal saving them from several losses by waiting for a more meaningful signal. Moving averages can smooth out the price action of a trend.

Some traders can see indicators as making charts messy and cluttered versus just price action. The truth is you can use too many indicators and confuse yourself with conflicting signals. The best way to use indicators on your chart is to keep them limited to one for momentum like moving averages, one to measure overbought/oversold like RSI, and one for reversion to the mean like Bollinger Bands. All these indicators can help you see where price action is in its cycle in relation to historical metrics.

Another point price action purists bring up is their belief that professional traders don’t use technical indicators, however, that is simply not true as many Market Wizards have talked about their use of technical indicators in interviews and in their writings. Paul Tudor Jones, Jerry Parker, and Ed Seykota all mention their own use of moving averages at times in their trading, risk management, or backtesting for system development.

Both price action and technical indicators can be quantified and backtested and used as trading signals. So whichever one you use, both trading price action or technical indicators are usually much better strategies than trading based off your own or other’s opinions or predictions.

 

가격 행동 대 지표
거래 세계에서는 거래 가격 행동만이 최선인지 또는 기술적 거래 지표가 거래 결정에 가치를 더할 수 있는지에 대해 많은 서클에서 지속적인 논쟁이 있습니다.
많은 사람들은 다른 지표를 추가하여 결정을 복잡하게 만들지 않기 때문에 가격만을 기준으로 거래하는 것이 가장 좋은 거래 방법이라고 믿습니다. 그들은 당신에게 필요한 것은 가격뿐이며 지표는 가격 행동의 파생물일 뿐이라고 주장합니다. 그러나 그들은 지표가 가격 행동을 필터링, 수량화, 측정 및 표현하는 또 다른 방법이라는 사실을 간과합니다. 지표는 차트에서 가격 행동을 볼 수 있는 능력에서 아무런 영향을 미치지 않으며 단지 그것을 측정하고 다른 보기를 보여줍니다.
또 다른 주장은 지표가 뒤처지고 있다는 것입니다. 이 생각의 오류는 선행 지표가 있다는 것입니다. 가격 행동과 기술적 지표는 항상 미래가 아닌 과거를 보여주고 있습니다. 지표는 각각의 새로운 가격이 과거의 차트에 인쇄되기 때문에 과거의 가격 행동을 측정합니다. 차트 패턴을 사용한 거래 가격 행동은 궁극적인 돌파 신호를 생성한 가격의 이력을 거래하는 것입니다. 가격과 지표 모두 미래에 일어나지 않기 때문에 후행하고 있습니다.
많은 사람들이 거래 가격의 단순함을 좋아하지만 변동성이 높은 시기에는 이동 평균, MACD 또는 RSI와 같은 기술 지표를 사용하여 거래하는 것이 더 쉬울 수 있습니다. 이러한 지표는 가격 움직임의 많은 부분을 걸러내고 순수한 것보다 적은 신호를 제공하는 데 도움이 되기 때문입니다. 가격 거래. 가격 행동 거래자는 범위의 5가지 잘못된 이탈 신호를 수신할 수 있는 반면 이동 평균 크로스오버 거래자는 더 의미 있는 신호를 기다리면서 여러 손실로부터 보호하는 단 하나의 진입 신호를 얻을 수 있습니다. 이동 평균은 추세의 가격 움직임을 부드럽게 할 수 있습니다.
일부 거래자는 지표를 가격 조치에 비해 차트를 지저분하고 어수선하게 만드는 것으로 볼 수 있습니다. 진실은 너무 많은 지표를 사용하고 상충되는 신호로 자신을 혼동할 수 있다는 것입니다. 차트에서 지표를 사용하는 가장 좋은 방법은 이동 평균과 같은 모멘텀에 대한 지표, RSI와 같은 과매수/과매도를 측정하는 지표, 볼린저 밴드와 같은 평균으로 회귀하는 지표로 제한하는 것입니다. 이러한 모든 지표는 과거 지표와 관련하여 주기에서 가격 조치가 어디에 있는지 확인하는 데 도움이 될 수 있습니다.
순수주의자들이 제기하는 또 다른 포인트 프라이스 액션은 전문 트레이더가 기술 지표를 사용하지 않는다는 믿음입니다. Paul Tudor Jones, Jerry Parker 및 Ed Seykota는 모두 거래, 위험 관리 또는 시스템 개발을 위한 백테스팅에서 때때로 이동 평균을 사용했다고 언급합니다.
가격 조치와 기술 지표는 모두 수량화하고 백테스트하여 거래 신호로 사용할 수 있습니다. 따라서 어느 것을 사용하든 거래 가격 행동이나 기술 지표는 일반적으로 자신이나 다른 사람의 의견이나 예측을 기반으로 하는 거래보다 훨씬 더 나은 전략입니다.