Why technical indicators and MTS fail?

[SterlingTDR]

I was thinking long and hard, and now I realize that all the mathematical technical indicators (such as MA's, MACD's, and so on) should be dropped outright.

I spent months developing and testing indicators and mechanical trading systems, and I see that highly profitable MTS cannot be made. Thank God that human brains are still required to trade, not the power of the computer. At least we have a chance against the large banks. After all, if MTS could work, then the banks would sweep all of us off. I mean, who can have the bigger computer, Joe Schmoe or CitiBank?

Anyhow, this is not my original idea as to why indicators don't work. They don't work because they always have parameters! The length of cycles in the markets changes all the time, so a static indicator would become either too slow or too fast, producing either too late or too early signals. I realize more and more what curve fitting is. All the oscillators and "trend following" indicators such as MAs have them... Even Fibonacci lines are somewhat curve-fitting. Not only the fact that price rarely touches pip by pip (on which broker's chart? ), but the interpretation of which line retracement or what constitutes a breakout or retracement is vague.

The strategies most people use can be divided into two broad categories: Trend following and ranging, or expanding and contracting

Those whose strategies follow the trend will lose during the range, and those who use range-based strategies will lose during the trend. Plus, trading with tight stops and reverses can really give charity to the broker.


It seems that the market either trends, ranges, or whipsaws, which causes those who catch the trends, ranges, or executive stop-reverse tactics to lose all in their own turn.

Setting a smaller SL will cause one to be hit out much more often. Setting a larger stop loss would eventually give enough large losses to flush the depo... And I was a fan of stop-and-reverse tactics until the market changed.

And since the trend/flat cycles change all the time, you never know when the trend will become flat and vice versa.

Any ideas? Thank you.