Recently, however, most New York city traffic lights changed their interface once again. The symbols remained, but now the traffic lights added a counter - telling the pedestrian just how many seconds were left before the light turned red. Suddenly the traffic lights became much more useful. No longer were you required to guess just how many seconds you had to cross Broadway. In an instant you could make an intelligent assessment of whether to make a run for it or to wait.
The New York City traffic lights now changed from just a dumb go/no go signal to a useful indicator that provides the user with valuable clues about context. Now in the past I have been famously dismissive of indicators. Snarkily noting that they are useless for trading because they tell you everything about the past and nothing about the future. Well, one of the better aspects of getting older is that you learn to be humble and admit when you are wrong. The fact of the matter is that now I find indicators to be of incredible value to my trading.
Don’t get me wrong, I still think that anyone who relies solely on indicators for their trading decisions will have their head handed to them in the long run. Indicators are not tradable signals in and of themselves, but their are very valuable decision support tools, primarily because they lend a great amount of quantitative precision and objectivity to your analysis. For me, the indicators have been more valuable at screening out sucker trades as they have been at pointing out possible strong setups.
I have had a complete change of heart on the issue of indicators and now appreciate their contribution to my analysis much the same way I love the new New York City traffic lights. Oh and by the way, if you happen to be caught in the middle of the street just at the light turns red, don’t worry you still have time - there is a 5 second delay for cars. This is New York city after all, and the traffic planners aren’t stupid - like good traders they build for margin of error.