“I think most traders use canned indicators like a stochastic or RSI or MACD, with a fixed length without thinking much about them.” – John Ehlers
They take the default length, or one that performed well in a backtest, or even one that has been recommended by someone else, and they start trading with it.
They may have a good run for a while…
And then it falls apart for no explainable reason…
The basic problem is that market conditions change, but most indicators are fixed and don’t adjust to changes in market activity.
So how can we make our indicators more adaptive to market conditions?
Take a listen as John Ehlers explains a technique we can use to build indicators that adapt to market conditions and also shares a simple trick to check if indicators are in-tune with the markets or not.
Want to learn more of John Ehlers trading techniques?
Get the transcript
Got A Question, Topic or Guest you want to see on the Podcast?
Do you have a specific question, topic or guest you’d like to see on a future podcast episode?
Click here and submit your suggestion for a chance to have it featured on an upcoming podcast episode.
13 July 2017