Setting the proper period on an indicator

[PercT4b]

Many technical analysis indicators are standardly set on 14 periods, but I was wondering if adjusting the period could make a significant difference for a correct trade.


How much does a proper period matter for you, and how do you properly set it?


P.S.: which could be a proper period for a day trading strategy?

P.S. n.2: would be great if somebody could share his strategy, just to see a practical example.

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[jackg]

I've considered this before and then just thought it wasn't very useful because you can just change the price interval of the chart you're using instead.

Back to the question, I'd lean to getting as many points as possible (especially on shorter timeframes) - but this might depend on eyeing the chart for each individual currency and seeing how long it takes to break down/up normally and adjusting your indicators accordingly (perhaps trying full time, half time and 2/3rds). Once you've got an idea, you could also go back a few days/months to test it out and see how well it looks.

[justdimin]

I've considered this before and then just thought it wasn't very useful because you can just change the price interval of the chart you're using instead.

Back to the question, I'd lean to getting as many points as possible (especially on shorter timeframes) - but this might depend on eyeing the chart for each individual currency and seeing how long it takes to break down/up normally and adjusting your indicators accordingly (perhaps trying full time, half time and 2/3rds). Once you've got an idea, you could also go back a few days/months to test it out and see how well it looks.

That is a correct approach if you are a very quick trader, if you plan is to buy it and sell it within an hour then you should definitely consider putting it as short as possible and including as many points as possible at the same time. However if you could wait a bit more then you could take it a bit bigger as well, like for example you bought today and max you can wait is until tomorrow? Then you can enlarge the period as well, whereas if you bought it today and can sell it anytime within a week? You could take it in a huge margin.

So, it depends on when you buy it and when you want to sell it and generally you make it linear, shorter the trading period shorter the indicator checking period as well. I personally deal with 1 hour because I just like to trade within a big margin, all those 5 minutes mean nothing to me because it would require me to constantly check it.

[teosanru]

Many technical analysis indicators are standardly set on 14 periods, but I was wondering if adjusting the period could make a significant difference for a correct trade.


How much does a proper period matter for you, and how do you properly set it?


P.S.: which could be a proper period for a day trading strategy?

P.S. n.2: would be great if somebody could share his strategy, just to see a practical example.

There is no golden rule to it, the best strategy is based upon hit and trial, to be honest, 80% of traders use all the indicators on default settings and have been doing pretty well using these settings only, but tweaking indicators might help you in getting some early triggers but obviously as the number of triggers would increase the profitability from each trigger would definitely go low, traders make this compromise and adjust their Risk/ Reward accordingly to make sure that they are in a correct trade, also no one would give their holy grail if they have one because if you share a trading strategy with someone, it really stops working. this is a great rumour in the trading community and everyone really obeys the rumour.

[Mahanton]

There is no golden rule to it, the best strategy is based upon hit and trial, to be honest, 80% of traders use all the indicators on default settings and have been doing pretty well using these settings only, but tweaking indicators might help you in getting some early triggers but obviously as the number of triggers would increase the profitability from each trigger would definitely go low, traders make this compromise and adjust their Risk/ Reward accordingly to make sure that they are in a correct trade, also no one would give their holy grail if they have one because if you share a trading strategy with someone, it really stops working. this is a great rumour in the trading community and everyone really obeys the rumour.

I dont really believe about those holy grail because if a certain indicator+analysis works for you doesnt mean that it would also works for others.There are still factors which are needed for you to be profitable.
You cant really just easily take consideration on copying others for you to be profitable.I do highly agree that this is based on hit and trial and using up or in terms of duration then it would really be indeed
on default settings most of the time and people or traders doesnt really mind off to change it up because they would really use it directly as it is.

[palle11]

but I was wondering if adjusting the period could make a significant difference for a correct trade.

It can make difference if you start seeing it on your profit. Every platform has a custom  setting for the trade so adjusting it is not bad to see if it will lead to better trading experience. Practically, you can know if the adjusted figure or setting can work out if you back track the trading terminal chart and you can use that to see the historical perspective or performance of trade. You can keep adjusting the settings to suite what you are looking for.. On the timeframe for day trader you can consider 30 minutes and 1 hour.

[wxa7115]

Many technical analysis indicators are standardly set on 14 periods, but I was wondering if adjusting the period could make a significant difference for a correct trade.


How much does a proper period matter for you, and how do you properly set it?


P.S.: which could be a proper period for a day trading strategy?

P.S. n.2: would be great if somebody could share his strategy, just to see a practical example.

Different indicators have different settings that are considered to be the standard, if you want to know more about them and the alternatives that you can use and why this is the case then make a quick search for the indicator that you are interested in using and look for the creator of the indicator.

Once you have the name look for books written by this person and most of the time you are going to find full strategies based around the indicator they have created and how they arrived at those settings, this will give you way more insight than whatever we could say to you as the information that you will get is coming straight from the person which understands the most about how the indicator actually works.

[Bitcoin_Arena]

Many technical analysis indicators are standardly set on 14 periods, but I was wondering if adjusting the period could make a significant difference for a correct trade.


How much does a proper period matter for you, and how do you properly set it?


P.S.: which could be a proper period for a day trading strategy?

P.S. n.2: would be great if somebody could share his strategy, just to see a practical example.

14 periods is usually the default for most indicators, but depending on your strategy, you can adjust it accordingly. For example, there's a scalp trading technique that required one to adjust the MACD from its default to 1 minute time frame while the chart was at a 15-minute time frame. Its win rate wasn't bad.

So time frames entirely depend on your trading technique. Scalp trading requires short time frames if you have got a lot of time looking at the charts, while other techniques can do with 1 hour or even 1 day time frames.

[tranthidung]

14 periods is usually the default for most indicators, but depending on your strategy, you can adjust it accordingly.

It is personalized indicator but because most of investors or traders, exclusively newbies use the default parameter 14. It is a key for whales and Mr. Market mislead newbies with their technical manipulations.

We can not change the fact but should be aware of such in order to have better ability to smell some kinda manipulations from whales. 

[Ararbermas]

For me there is no problem with default settings even using a short time frame in trading , but i used 2 more indicators in order for me to find out or to determine the real potential of the growth rate and that is macd and Bollinger indicators, so far it's still good wherein there no problem with my trades.. And by the way you know sometimes when it needed i set moving average into 200, or 25-50.. So that i can get more information where will be the next direction of the candles..

[cabron]

14 periods means 14 days. The RSI by default has 14 periods. You should notice that the price in the daily chart normal will change significantly every 2 weeks.  If there will be no price breakouts after 14 days, chances is that it will happen in the next 2 weeks again.

Some traders will change this base on their experiences. Oscillators for instance are edited by the traders for their specific trading skills to have 7, 14, 28.

[wxa7115]

I always use the default setting but if you want to adjust it of course there’s will be changes and if you to find out those changes and think if it works for you or not. You are just adjusting the time frame but a lot can be change, so make sure you know it. Most of the indicators works for a day trading, though it moves faster so you might analyze continuously until your day is done, you can mix any indicators its all up to your strategy.

This is the safest option after all those that created the indicators have very specific reasons about why the specific settings they set are that way, so for most traders it is a good idea to just let things as they are.

However for the advanced traders then it is possible to change the settings, but they need to be very careful and read books about this specific indicator and what other expert traders think about this and what other settings they like and why this is the case.

[Husires]

Technical indicators measure what is happening in the past to help you predict what could happen in the future.

• all duration is can be adjustment according to market patterns and is not restricted to a period of a week or more.
• indicators measure the supply and demand in a period of a week, or several weeks.
• then picking up the manuscript of the resistance levels may form from those points attractive for buying and selling.

Day trading is a strategy of recognizing and predicting what a currency can rise and therefore what is determined by levels of liquidity and change which can make the period vary from a few minutes to a few hours.

about today Bitcoin price formed a triangle around $48,000, 55-day Simple Moving Average (SMA) at $44,000 so price can moving upper and down that range.

source: https://www.fxstreet.com/cryptocurrencies/news/bitcoin-price-prediction-btc-could-drop-to-43-000-this-week-202109131317

[Rehan Zakir]

Yes brother. this is a very important topic. If anyone set the wrong settings in indicator. Then it will effect in their technical analysis. Most probably the period setting will be set by default. So, we don't need to do anything. Set the proper setting of an indicator. Some popular trading indicators are SMI, RSI, bollingers bands,and SMA. I am using these indicators in my trading.