TBL – Technical Indicators – I-A

This is the first in a series of posts in which I am going to describe the technical indicators we use in our TBL system – including how and why we have customized them for use in our short term trading method.

There are literally dozens of technical indicators – some are unique, but many are variations on a theme.

Basically, all technical indicators are created from a small set of data: market – price – quantity – time. Said another way: What was sold, how much was sold, at what price was it sold and at what time did the transaction took place.

From that rather limited amount of data many technical indicators are created.

Over many years of trading and having worked in a technical capacity in the securities price charting industry, I have selected a few time tested and reliable indicators for use in my short term trading system.

Using technical indicators, in our opinion, is like taking a laxative. The right amount applied at the right time can really make things move along smoothly. Too much, on the other hand, can often lead to undesirable complications. I have seen too many traders use too many technical indicators – with the results that they over analyze and confuse themselves.

Short term trading is often fast paced – any system designed for effective short term trading must be able to produce conclusions rapidly.

With this in mind we have carefully selected our technical indicators. Short term trading is all about price oscillations – identifying tradable oscillations and knowing when to enter the trade, set stops losses values and where to take profits. These decisions often must be made quickly in the volatile markets in which we trade.

Our solution has been to design a trading system that is essentially visual. There are numerical considerations to be made, but even the math can be done visually and very fast.

I am going to describe our TBL technical indicators in the next several blog posts including how we create them – and how and why we use them.

If you are impatient you can get the whole story and more right now by ordering our eBook, See the Music of the Market.