Value Research Gurus: Joel Greenblatt

Why Price Action?

 No RSI. No MACD. No Stochastics. Only Price Action? Why?

Because it is enough to work. Plain, simple and without information ovverload. That doesn't mean I don't use any indicator. I use but one: 21 EMA.

Have I used indicators before?

Yes. I have tried almost everything. I would chose one, backtest it and would think, "This is IT." The illusion lasted for few profitable trades and then took one loser to wake me up. And the cycle continued.

Am I against indicators?

No. I am against using indicators for myself. This can be partly because I never understood indicators properly. Fair enough. But I found out that depending on indicators made me ignore other things which were equally important for trading. Indicators are. at best, a proxy for stock demand and supply. Thus, by their very nature, they are derived from something more fundamental. So, I decided to understand the underlying before moving to indicators.

Would I use indicators in future?

We will find that out. Later. 

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