Using Indicators in Technical Analysis

Here is an excerpt from my chatroom regarding my use and thoughts on indicators in terms of trading and market analysis. The room is free for anyone who wishes to stop by and just chat and share ideas throughout the day. For instructions on logging in: http://www.tradingfrommainstreet.com/roomsetup.html Other platforms to access the room besides mIRC are http://pidgin.im/ and http://www.icechat.com/.

11:08: FWallet- I am afraid of going down that path of being a chartist and looking for patterns etc...cause there probably is one failed pattern for every successful one...but people tend to foget the failed ones and are willing to place all their eggs in one basket...
11:08: charlie- it is no doubt a lot of the indicators are great or people wouldnt not use them, but too many things confuses me
11:09: Toni- indicators are just based upon price movements and volume anyway... just learn those... then you dont need the indicators that try to read it for you
11:09: FWallet- it's really tough...a good trader will think in probabilities...but it takes a long time...the concept of pace reminds me of Time and sales...which I think is cool
11:09: Toni- essentially it is like reading time and sales.. but reading it on a chart
11:10: FWallet- yes yes...that why I love the concept...it not the tradition crap TA we are all used to
11:11: FWallet- Larry Williams once said that in 20 years of trading...he has yet to me a rich chartist
11:11: thiscoloradokid- I still like indicators for scans. A great one is finding a crossover of an sma10 on a stock's ATR. Sounds pretty chartists, but...
11:11: FWallet- I like the simplified TA...that to me is good and very useful
11:11: Toni- this 2B is going perfectly
11:11: opw- anything simplified suits me :)
11:12: Toni- well for price reversals, like a daily high reversal, the 10 crossing the 20 sma is a great indication of a base having gone long enough
11:12: FWallet- I think for scans indicator may be good...cause it keeps thing consistent...you can't flip through 500 stocks every 15 mins...
11:12: Toni- to allow for a strong breakdown like a drop off highs, then a base... basing until the 10/20 start to really converge
11:13: opw- T, that is exactly what I do with the 10/20 crossing
11:13: Toni- the actual crossover can take a bar or two later but the convergence is a good sign that it has rested long enough... that it wont as likely be a false breakdown trigger
11:13: opw- yes, quite often it crosses just before the breakout
11:13: Toni- yes, but within that base itself so there are practical aspects. also watch for slower upside towards the end of the base... so watch the pace within the base and dont rely just on the crossover... also watch for declining volume within the base
11:14: Toni-Avalanche: For more information on this setup, please see http://www.tradingfrommainstreet.com/techanalysis.html#4
11:15: Toni- those example dont have the crossover but that is the type of setup i mean... the example with the crossover though would have the base at the 20 sma then the 10 sma coming down to cross it. these are basing at the 10 sma