All language subtitles for 5. Putting Together Your Indicator Combination

Let's talk about putting together your and how to put together your indicator combination again, that's

not my combination.

It's your combination that you feel strong about, comfortable with and really, you know it inside

out.

Right.

So let's talk about how to put that together.

So step one, you want to pick a primary, right?

And again, you can back test this, you can perpetrate it.

You'll have all sorts of opportunity to practice with it.

But start thinking about a primary indicator that you're going to, you know, start using.

You may have one or two jumps on your mind and then you want to pick a confirming secondary.

Right.

So this is all kind of stuff we've learned a little bit before.

You pick your primary, pick your secondary.

But here's the key part of this lesson, so to speak.

As far as putting together your indicator combination is it's important to have the measure both have

them measure different things, then both are going to be indicating whether it's a trend maybe or continuation

or a reversal, whatever it might be.

And it's ultimately going to get a signal whether you should buy or sell or do nothing for sure.

But the purpose of the indicators there with their philosophy behind it and their technique behind it

is they should measure and do different things.

For example, you don't want to have your primary be an RSI and your secondary be a sarcastic oscillator.

You probably can figure out why that is.

And that is why, because both are momentum indicators.

You're not getting a really true fair look at it.

They're different as far as momentum indicators and they have their strengths and weaknesses compared

to each other.

Have a lesson on that with those two, for example, but would be better if you had something outside

the momentum indicator family to use as either the primary or the confirming.

So you have councils that you know that, you know, two different eyes in effect, but they're indicators,

real things, but they're two different ways of looking at it.

And if you get that, then you're less likely to have a false signal or something, because not only

is my primary showing something, but something that's different.

Family of Indicators is also confirming the same thing that maybe, let's say, for example, this is

a buying opportunity and that makes it a very and then you'll feel much stronger in your trades and

more confident in that because you have these two different looks at it.

So here's a classic error around that.

You know, if you think about kind of still one of those momentum ones was, you know, a lot of folks

will say, well, I love that moving average crossover in the quarter.

And so I'll use the shorter time frame as my primary, the blue line in this example, and I'll use

the longer time frame, the pink line as my secondary as my confirming one.

Now you see the error in that.

It's a pretty classic error, right.

Because if you're using where you're not, we're not talking about actually using them to crossover

prices.

We're talking about crossing over each other.

And as we remember from previous lesson, well, the moving average crossover indicator, when they

cross over each other and you're using that as your buy and sell together, the are in effect one indicator.

Right.

So I'm not looking at one, the blue one, the prices go above or below the blue line or above and below

the pink line.

Couldn't you not even have prices on the chart at all?

I'm looking at, you know, the two lines crossing each other and that is in effect, one indicator.

So you want to confirm that with another indicator, like the MCD, for example, moving average convergence,

divergence or some other indicator to kind of confirm that.

So just be aware that, you know, indicators are using maybe multiple parts of a chart pattern or candlesticks

or whatever you'll understand.

Like this is a classic example where it's how to use them both together to be actually the real indicator.

And then you need a secondary to cover that.

So just be aware, aware of that.