Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

20 Reasons why your Buy/Sell Signal Indicators will Fail

1 min read

These days people are much more fascinated towards Mechanical Models aka Auto Buy/Sell Signal Softwares and Autotrading Softwares. However at some point of time they do find themselves still loosing in this markets even after adopting various strategies. Here are some points which explains why a trader fails by adopting a trading system with half baked knowledge.

Frustrated-Trader

 
1)You think Buy Sell Indicators are predictive in nature. However in reality the mathematical indicators aka Auto Buy or Sell Signals dont have brain to predict the randomness. And eventually you will fail at some point of time.

2)You want a Buy/Sell Indicator that makes money

3)You want a Best Intraday Buy/Sell Indicator and you dont know how to gauge a Buy/Sell Indicator.

4)You are still trading with subjective bias like Trading Patterns, Elliot Wave,Gann, Fibonnaci, Divergence etc along with your buy/sell indicators.

5)You are jumping from one stock to another stock randomly while following the Buy/Sell Trading rules and selecting the trades again randomly.

6)You are searching for double confirmation by using multiple buy or sell indicators or correlating your indicators with News Events, Global Markets, TV Channels/Analysts or Comparing the Brokers/Tipsters/Analysts calls with your Signals.

7)You dont know how to backtest a trading system which explains the nature of the trading system. And probably you dont want to spend much of your time in learning the basics of trading system.

8)You loose faith after 5-6 continous losses in your trading system.

9)You are probably trading the signal in a wrong timeframe.

10)You dont want to trade all the signals.

11)You are a lunch time or dinner time trader and you want to trade the signals only during those times.

12)Taking the trades based on your anticipation of future Signals rather than trading the actual signals.

13)Averaging the trades when market moves against your position a little.

14)You are too lazy in trading and following the Buy/Sell rules.

15)You are using the most commonly used trading system among the people that is invented somewhere around 1960’s or 1980’s.

16)You learnt a simple trading system from the most popular book and you are using it.

17)You dont know whether the Buy/Sell Signal indicator will work for a particular trading instrument or not and you are willing to take a risk by trading it.

18)You seen the Best part of the trading system and you got confident and you want to trade the subsequent signals.

19)You dont know the mathematical logic behind the buy/sell indicator. However you are blindly interested in following it.

20)You had seen Paid Buy/Sell Indicators Advertisement in Facebook/Twitter which gives 85%-95% guarenteed success and your are interested in purchasing it at any cost.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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62 Replies to “20 Reasons why your Buy/Sell Signal Indicators will Fail”

  1. Thank you sir,
    It was like telepathy because I was just doing research on these robots.
    I had come to your website to check if you had any articles on Autotrading.
    Your website is a goldmine of knowledge.
    Do write some article on various vendors present worth mentioning who sell such products.
    Like the one you have on symphony, just a small request please.
    Thanks

  2. Sure some points are genuine where its the lack of traders effort to trade the trading system. But if one understand the trading system well that it has positive expectancy model and also other aspects like maximum drawdown, maximum continuous stop loss, ROR, CAR, Ratio and POsitionsize which will fit the model and then choose the instrument according to there capital.

    Auto trading software’s can actually make a hell lot of better returns then anything else.
    Regards
    Mohit (wealthcreator)

    1. Yes returns come slowly and steadily here when you have the complete understanding about your trading sytem. Wealth often created with Knowledge and destoryed by ignorance!

      1. True, Everyone who want’s to trade based on mechanical systems has to understand the system 1st and then see if they are disciplined enough to follow the system. what are objectives of system and is it on co relation with there own objectives.

        But fact is most people are lucrative towards fancy cheap ad’s or on small fee which again makes them fall more down in the hole. A system is a tool and a capital is the fuel …..if u want a BMW system u must be having funds to trade with it…… but people mostly have 20k to 50k and then trade silver big which average movement of the day can wipe them of there capital up to 50% just in 1 trade

  3. Hi there, read you post very informative and insighful, if anyone out there is ready to invest the time and money to be ahead in the race in stock market what would you suggest them.

    regards

    Shankar

      1. what would you suggest them to focus on, if it is about dedicating time, googling everything still takes me to what you have written, is there anything as an insight that you would tell investors like me.

        regards

        shankar

          1. I am sorry If I am being too insisting about wanting to be ahead, if things available on the internet is outdated, suggest me names of study that would keep me updated,

            regards

            Shankar

          2. Ask yourself!

            1)What does a Hedge Fund Prefer Pair Trading/ Portfolio Trading / Timing models or trading with EMA Crossovers, 200 day Moving Average, RSI , Stochastics etc?

            2)Why Text book indicators are riskier to trade?

            Go and Find math models with are not less preferred by common individual traders. Try to stand outside the crowd. For Example studies like Market Profile, Foot Print Charts, Order Flow are very less know to people and hardly 0.0001% of traders are following it. The Problem is there are no much Educational materials available. If available the study itself looses it importance!

  4. sir that was my whole purpose of writing to you that lot of people are working with these models and still loosing money tell me honestly how many people have you seen making money sir I also can predict good but confidence is still lacking, these models are just confirmations from your end that what we r thinking is somehow right and might result favorable I do not mean to affend or disturb anybody I told my friend to stay short in nifty but I was not short lack of confidence I was short in crude but my sl hit loss of 2000 but lost the profit which I would have made I am just requesting a system wjich will enhance the confidence combining two three methodologies together if possible. I am sorry if I have hurt anybody

    1. Double Confirmation Simply Never Works unless there is a very good correlations are running between your two System. Yes I had seen very less amount of people who follow the system very religiously like a military soldier. And they run their money like a fund. They simply do follow the rules rather than Predicting the market. You cant predict the market continously and at some point of time you fail and mostly you fail big!

  5. sir all i am requesting a software or a group where two or three or more good analysts should suggest particular scripts to trade regularly positional as well as on day trading basis. similarly if making a software then day trading and positional stratergyshould be different and more informative. mostly software and afl looks into the future. I request that everyday they should have a fresh signal and if possible some sort of dashboard should be made to give information to the trader with proper sl and target. Targets are just predictive numbers. i am only asserting for the benefit of all the innocent trader community. Everyone puts up their hard earned money and lot of people have already lost we cannot recover our money but at least lower down the loss they incur.

  6. Sir

    I would like to know, whether am I making money, if i follow your live signal as per SuperTrend religiously in Nifty and Bank Nifty ??

    Bhailal

    1. You will be making money only if you follow the rules. However if you are trying to follow any above 20 noise fators eventually at some point of time you will end in a loss.

  7. hello sir i am watching ur articles regularly, i am using ur super trend buy /sell signal software. pls explain me how to follow the signals and avoid the signals and how to back test the signals. i continue loss in my commodity trading , so pls explain me how to pick the good signals and avoid bad one.

    1. The problem is in system matic trading you cant avoid the bad trades and your bad trades should not affect 20% of your captial then your system is rated as good. We will write more on how to rate your trading system.

  8. Respected Sir,
    All these days you were doing and publishing buy sell indicators what happen to you all of a sudden? are you started practicing auto and algos now?

    Sir I contacted symphony and they told its just a tool but you have to aim it. & they have no profitable strategies with them.
    Why biggest of biggest banks and prop desk losing money, if this was possible? it was very horrible saga on turtle trading!
    goldman sachss sinks?
    vijay mistry of HSBC struggling?
    MF’s are failing even after have lot of money?
    JPM AM company gone in rounds?

    Top Hedge funds making money and how? it a open secret.

    kitkin

    1. We are practising algo trading more than 1.5years. And yes the Indicators are published very often refer our amibroker section for more updates on indicators.

    2. MF are buying when FII is selling so they will suffer when market is going down as FII sells in bulk….

      So MF only helps if you invest for at least 5+ years…

      cheers!

  9. Sir, need your view on Price action trading also which is now a days practiced by many traders.

  10. Respected Sir, As I am not able to move freely because of my Health condition, I entered to this Stock and Commodity intrady Trading few months back with the guidance of a about 10 years experience Trader. He had come to my place and started trading in my A/C. Within two week time he lost lakhs of rupees of my money including a few lakh which I borrowed from local finance and the Trader ran away.
    Sir I am in deep financial trouble. Will you please help to recover the lost money at any cost from the Share & Commodity market. Expecting your valued reply. SREEDHAR. K

  11. I am interseted in all commodities &equity services and want to trade according to your chart.Please
    send me detail of annual/monthly charges.

  12. “Initially invest More of your time and less of your money!”….Hi sir..i love these words and regularly YOU DO YOUR BEST with right way of trading not with auto buy trade signals…..

  13. I totally agree with rajendran here, i would like to share my personal experience here. And this would go out for people who are new to trading and who have no idea what trading is. First of all I risked a lot of capital(millions, and lost of all of it) because I thought that with supertrend i am going to get rich immediately. Well after losing a lot , and I am being honest here, i lost a lot, close to 31 lakhs in just a matter of few months. Just like any other profession even trading requires lot of patience, dischipline, study. Also one more thing out of the experience, you need to have a lot of capital and you should never trade with margins. I used to get 5 times intra day margin and I was gloating at that point . But after learning my lessons the hard way now I am on the backfoot.

    I dont want to encourage or discourage anyone, all i am saying is that this may not be everyone’s cup of tea

    1. true words, our names are different but loss occurs in same manner to us. take a care of health.money is nothing.

  14. Rajendran sir, you seem to be an expert..good stuff published.
    was curious to know if you are generating any profits on consistent basis or whether you are also in losses after using all these indicators. if in profits then what’s the indicator that you have been successfully using. This is for benefit of everyone..as there’s too much of confusion..thanks a lot.

    1. @vijay :

      -Iam not using too much of indicators
      -Iam more concerned in controlling losses rather than profit making and so far quite successful in controlling the amount of losses.
      -The indicators are our own custom mathamatical models. And quite successful in running a fund.
      -All the collective experience written are my own experience plus my interaction with Newbie Traders/Investors, Prop Traders, Brokers and their understanding about the markets.
      -The above post conveys that indicators are not wrong. They way your understanding about the indicators are wrong. Hope you got it.

      1. Thank you sir for your response. what would be your favorite set of indicators? if you can kindly share any custom one that you normally prefer.

          1. rajendran sir, seems my last reply has been rejected..any specific reason? i hope you are not getting offended..

          2. Every time if you are sending your comments with different mail id/fake mail id from the same ip then it directly goes to spam box. As the commenting system is designed so

  15. Dear Rajandran,
    Am a subscriber to your newsletter for quite along time & I would state that you have been doing a commendable job.
    I have seen & following your Amibroker live market buy sell signal chart at Marketcall site, it’s good.
    My querry, 1) Where do I find the tutorial, keeping in mind the above 20 points. 2) To trade market is the free chart sufficient or do you have some paid subscribption, if so the charges? 3) While following your marketcall free chart a thought came to me , do trade have any stoplosses or the trade stays live till the next signal, if yes , it is ok for nifty but what happens for JPASSOCIATE . 4) How to use the Support / Resistance line. 5) When to & not to initiate a trade , as per chart signal ?
    Hope have not bored with such simple querry.
    Regards
    Gouranga Mitra

  16. I was search lot of trading system but no one is better.can u find any trading system that give return with acuracy of more than 70 %?

  17. Hi sir

    I am a small trader and new trader in mcx. Please suggest which trading software is suitable for me.

    Regards
    Prasanna Kumar

  18. Rajendran, what service do you offer? Paid services I am asking? All things here are contradictory. You are writing you are owner of this site. On this site automatic buy and sell signal indicator software is for sell.In this post you are saying even if someone uses this software he will loose his all capital in couple of trades. For that you are giving step by step explanation. What is all going on?
    finally what is this site? Up side there are ” charts, premium, nse signals, mcx signals,market profile,library,tools” If I click premium there you are selling automatic buy sell indicator software.
    MY QUESTION IS WHAT IS THIS SITE? OR IS IT COMPLETE WASTE AND CONFUSION?

    1. We are not selling indicators! Take your time and go thro the services section. The above post is to explain that new traders have lots of misconception about buy and sell signals. I guess the above post is nothing overhyped here!

  19. Hi dude,

    My investment is 1lakh….how many lots can I do in crude oil for intraday ( based on your signals)

    Thara.

  20. Dear Sir,

    I want following things as parameters like if I say yes/no in parameter than this code will overlay commands on AFL here are following codes also where this is available as under :

    Parameter settings as yes / no this ALF/ DLL by predefined parameters

    If we select intraday / EOD (trades would be closed by 9.30-3.15)

    TREND BLASTER AFL HAS THIS CODE

    If the price is above 200/50 dma than only trade BUY or else ignore and vice versa like if the price is above 200 dma and buy comes than will buy or else will ignore & vice versa200 DMA AFL HAS THIS CODE

    Trade SL YES / NOIf yes than will take SL as previous 2 candles high / low.If there was buy and I have selected SL yes than where the signal came previous 2 candles high would be SL and vice versa.

    Please inform this work can be done ?

    Thanks,

    Viral
    09820166717

  21. Today I was thinking why I am failure as a trader in stock market, why I m loosing money every time when I was trade? Frankly speaking I don’t have answer.. But yes I have to make money from this market only n I have faith in mine that I will do…. But again question in mind is
    HOW? HOW? HOW?
    So I am still find such kind off solution n try to make it.. I am just through your website n I am going to try to use your buy sell indicator for trading… Let see what happen……!

    1. In my opinin if we trade in a group of say 100 persons following one strategy, one item like crude oil or nifty options like we can get success. If we follow supertrend indicator 5 min chart means same. No other indicator. If one item means only one item. Follow it for life time. Like in crude oil if buyers are more than sellers then the price will surely go up. Vice versa. Remain in trade till trend changes.

    1. If signals based on indicator goes wrong human can also equally go wrong. No indicator is working all time. At least machine can help to find opportunity.

  22. Sir,this is vijayakumar from Hydrabad my 1) question is what is the accuracy of commodity segments with the help of above 5 minutes chats with supertrend,,buy and sell total calls accuracy in percentage while by back testing with a year or six month time period sir..
    2) this is profitable when I adapted above mentioned strategy continuously without missing..
    Please answer me sir thank u..

  23. Sir, guid me how to make the strategy? And how to calculate the buy and sell signal as according to market value of low/high and open/close value.

  24. hello sir,

    i am watching your contents since long time. I need your help.

    in my trading afl i want to add last 5 trades afl .

    can you plz help me.

    regards
    shashwat

  25. DEAR SIR, I AM REFERING YOUR CHARTS SINCE LAST MONTH. I HAVE NOT TRADED YET. I AM HAVING ACCOUNT WITH ZERODHA. IN THE MEANWHILE I WANT TO JOIN YOUR WORKSHOP FOR ONE OR TWO DAYS EVEN IT IS PAID ONE AS I AM VERY MUCH INTERESTED TO START FULL TIME TRADING. AWAITING YOUR REPLY. THANKING YOU SHANBHAG FROM HUBLI

  26. Hello sir
    I`m new to this trade and all I need is how to detect signals before buy or sell ( does not meant auto signals) , I meant by trading system . I cant understand this signals perfectly as on charts, I am doing on commodity. And all I losing my lots when signals going single stroke. That is , it does not coming crossing over open points. its keep on going single side ie increasing or decreasing points. how to detect this commonly. if any suggestion please.. And I am following 80% trading rules as you said above. please try to clear my doubts. please.

  27. Sir, l am a new trader and almost know nothing about share market trading. But l want to learn it earnestly with my soul. l think your suggestions will help me a lot in this purpose . Sir, please suggest me the most possible way to get success in this event.
    I am also agree , if you suggest me to join any of your classes, if there may be any option.
    Sir , please help me with your valuable suggestion.

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