All language subtitles for 2. Validator Indicators

So how can we apply this concept of having combining different types of indicators and that's where

we call the term validator indicators, are you're validating something so kind of how it works as you

choose a primary.

This is your ruling concept.

This is the thing you're really searching for when you're out there evaluating security, since you

have this primary indicator that you use all the time and then you have a secondary indicator that comes

into play once your primary is may be found, an opportunity in your secondary is going to be kind of

confirming or say, yes, that looks good to me.

The secondary indicator.

So it's a go or maybe a no go as far as investing in that security.

So, for example, you might use a simple moving average crossover rule as the primary.

Really easy, right?

You see the price of the line below the line as we learn in that indicator.

So using that as your primary, you're really out there looking for those types of situations and you're

watching for those.

So that's your primary.

And then you might use, let's say, for example, a momentum indicator like the RSI to confirm what

you're seeing with that simple moving, super moving average.

So you're saying, yes, this is a buy or sell opportunity, and then it's kind of confirming what you're

seeing with the other one.

So that's two indicators.

Working together, you can add a third or fourth two, but it's to start with like two indicators together.

And then you take action, like buying or selling or or sometimes very often actually do nothing until

the situation lines up or your primary indicator strong.

And you're confirming secondary indicator is confirming that primary is validating.

It's a validated indicator and confirming that that indicator and then you're making a stronger choice

with that.

And then around validator indicators, it's important to choose them ahead of time.

Right.

You're not doing this on the fly.

You're not doing that simple moving average and say, oh, today sounds like a momentum day or I feel

like a volatility measure today.

And what about those Bohlinger balance?

You know, you're going to choose them ahead of time because part of your overall strategy is part of

your overall setup as far as trading.

So the second hour, once you're going to choose ahead of time and you're going to decide how much emphasis

you're going to put on that secondary indicator, you know, how how much of a validator is that for

your primary?

And you could put a like a strength measure behind that secondary indicator.

Like, here's a simple one.

Like if the if the validator indicator says, yes, the same thing, it confirms it fully with the go

take action or it could be a hard stop.

Or if it says no, it's the conformations not approved.

I'm not trading at all because I need to have that confirmation.

A yellow might be a warning sign as far as you know.

Am I going to take action or not?

It might be close, but not fully as far as you know.

Maybe that's that secondary indicator.

Maybe it's getting some signals, let's say, is a buy as a buy signal, but it's not fully you're still

not fully comfortable with the Keyon in this.

Again, the choosing ahead of time that what is your secondary indicator and what are you going to do

when you get that measure is going to make it be real strong as an a go or no go green or red, stop,

go or stop.

Or we give a little bit more flexibility around that secondary indicator in terms of your primary.

And that's the key thing with validating indicators is once you've established your plan, be disciplined

and follow the plan.

One of the keys to success in training is discipline.

The whole idea of of trading with technical indicators, our technical analysis and indicators and other

tools is that you're taking emotion out of it.

You're following a plan.

You're following, you know, mathematics.

You're you're following things like market sentiment and herd mentality, all these things we learned

about.

So if you don't be disciplined, then you're kind of wasting wasting a little bit of it.

So be disciplined and follow the plan.

And one thing that a lot of people trip up on and as a warning is once you establish your rules, don't

change them to make something fit.

You know, sometimes you might see this great, strong primary indicator.

Oh, this looks like a bi.

I can't wait to buy it.

So good.

Let's see what the secondary says and all sounds like what you're secondary doesn't validate it.

Doesn't confirm it, you know.

Oh, but I really want to maybe if I just change the time frame on the secondary or change a parameter

on it somehow then they can kind of make it fit.

All right.

Well, if you're doing that, you're not being disciplined.

You're basically you're basically you're now adjusting your rules to to fit a certain situation because

you've maybe been caught up in emotion or maybe you've been caught up and like a fear of missing out.

You know, there might be something more going on there.

So just be aware when that happens that don't change your rules to try to make something fit.

Now, what's different than that is you can adjust your plan any time.

You can adjust your plan later.

But understand that would be a new plan.

Right.

And you'd be having a new thing.

You wouldn't be continually trying to make things fit.

You'd be like, OK, I'm using whatever this candlestick pattern is my primary.

I'm using some simple moving average over twenty days as a confirming now maybe saying, you know,

I like that moving average confirming, but I'm going still use my candlestick, but instead I'm going

to use an exponential moving average.

Instead of being ten days, I'm going to move that out to twenty days and see how that goes for a little

bit.

They're going to test that out in all that, so that's it, and that'll be not my new plan that I'm

going to follow, they'll be the discipline that will follow.

So it's a difference between trying to make things fit and trying to and then later just making your

plan better as you go along because you'll continually keep updating or maybe refining your plan, you

know, possibly or some folks you find a great plan after a while or very quickly.

And then they're like, this is how I trade.

And then they just look for those opportunities.

That's great to be in that situation.