Now, on to my next observation:
2. Lagging vs. Leading. To borrow some terms from macroeconomics, we have what are called "leading" indicators, and what are called "lagging" indicators.
Lagging indicators look back in time, and tell us where we have been, and are used to "predict" the future. Basically, lagging indicators look to the past, to "predict" the future. In general, much of technical analysis is the use of lagging indicators. "X has happened in the past, so we expect Y to happen in the future."
To think of lagging indicators another way, we look to the past to explain how we came to where we are, now. "X happened in the past, so, now, we have Y."
Leading indicators look forward in time: using the PRESENT to predict the future. "X is happening right now, so we expect Y to happen in the future."
To look at leading indicators another way, we look at today, to try to see where we are going. "X is happening now, so, we expect Y to follow."
I suppose it could be argued that much of technical analysis is the use of leading indicators, but, in general, does not technical analysis look to the past, to find the start of a trend? Using the past to predict the future.....??
Ideally, we could find 2 or 3 indicators which would tell us exactly, right now, where prices are headed in the future, so we can know exactly when to close a trade. Does anyone have a crystal ball??
However, more realistically: Are there some technical indicators which respond more quickly than others, to price movement? Alternatively, are there indicators with less lag?
I've added numerous indicators, discussed here, to my MT4 charts. Look at all that color! LOL! So many indicators, in fact, it looks like Christmas! It looks as if Walt Disney became ill on my computer screen!
Seriously, though, some of these indicators do look promising for use as exit signals. There are others I will play around with.
Unfortunately, I don't have the apptitude for programming that some here obviously do! So, backtesting will be difficult, if not impossible, for me!
However, just based upon observation, and RSX(14), mentioned in earlier posts, look like they could be very good as additions to the Nina System, IMHO. I've also started playing around with Envelopes.......
Well, it's obvioulsy way past my bedtime! Sleep deprivation has led me to become way too philisophical (and verbose?! LOL!)
May the pips be with you all!