Choosing an indicator is like choosing your own stock. This should be easy to understand, easy to process, and you can always relate it in the price action. This should be also relatable to your mistakes and is the closest one where price action and the basics of your indicators meet.
How did I come up with my indicators?
I came up by using different indicators I used RSI, Ichi Moku, Moving Averages, Bollinger, MACD, Aroon and Price exhaust. When I see a laggard one with price action I throw it out. RSI is somewhat the same in Price exhaust but Price exhaust is more of a pictorial innovation of RSI. I can see the momentum, the trends and the chance where I can buy on pullback and where I can lock in profits while RSI only tells the overbought and oversold levels of the stock. It made me get whipsaw a lot of times the reason I eliminated it in my system.
The next indicator I saw is Aroon. Most people say that this is the most laggard indicator but when you look at it on the monthly time-frame this is the fastest to recognize that the stock has already made it's bottom and an uptrend is coming. Aroon is also connected on the mistakes I did on the past where I always chase the price and in the end the stock will consolidate and that is where my discipline in only buying the pullbacks where established. Buying the pullbacks for me is the most valuable lesson I have learned in the market. It gives you more confidence in your trading, it let's go of all those nervous emotions you have inside of you, and it gives you a higher percentage profit than buying the breakouts.
The main indicator I use is moving averages or the Guppy Multiple Moving Averages plus bollinger. I can easily distinguish the trends, the Golden and Death Cross, the Alignment of the Stars, and the phases of where the stock is already. The phases includes of reversals/start of a new trend, if price action is trying to break out or break down. If the bollinger is on a squeeze for a long time. I also use the GMMA as my main supports when I am buying a pullback of an uptrend stocks. In buying you need to be more disciplined, you need to wait for the right time to enter, you need to enter while the stock is quiet and not on an outrage. When an uptrend stock is causing fear then that is the right time to enter. Buy when others are fearful as what Warren Buffet always say. The market is more of a battle of the mind! You need to have a strong mind to win this market!
You should know the uses of your indicators their strengths and weaknesses if you want to build your own system. I cannot share you the secrets of these indicators since it is my holy grail and once a system spreads the system will lose it's value. So I encourage everyone to look for your own combination of indicators that will help you in building your discipline in entries and exit, a way to eliminate all the emotions in trading, and be more confident with your trading career.
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