Continued from yesterday.

When it comes to chosing what market indicators to use to help a trader excel, there are a great deal that work well for a number of people. Some like the ADX, MACD, bollinger bands, stochastics, etc. etc. I like to keep things simple, however, and not use a lot of add-ons. The key is not that you need to eliminate all added market indicators though. It is simply not letting those additional indicators cloud your judgement of the underlying price activity. Indicators are based on lagging data, so no matter what, with experience, you will be able to see the same type of information your indicator provide you without have to clutter up your screens and possibly give you conflicting readings. I have seen too many traders miss a great setup because they use too many indicators and start to second guess their instincts and experience because the indicators conflict or they just don't have enough experience to be able to read the indicators.

There are different markets in which different indicators excel and in some market environments they just plain don't work as well. For instance, if you are falling into a range bound market, if it lasts long enough, your moving averages become pretty worthless, especially those that flat-line the quickest. Does that mean you don't have an excellent breakout setup getting ready? No.

Also, another common trap briefly eluded to is that people will often switch back and forth between indicators, much as they might by creating a ton of different charting pages. They don't give them enough time to learn the nuances of each indicator. Most the well-known indicators are valid and will work. You just have to have enough experience to know when to ignore them. I would, however, tend to shy away from whatever you hear is the next great thing if you have never heard of it before. Let it prove itself before you waste your time. The ones I have listed tend to be the most commonly used. Also used a great deal is Fibonacci and it works very well under many circumstances as well.

I have a lot of my charts linked to my level IIs, so if I change the level II symbol it will change all the time frames. I primarily daytrade the E-Minis and swing and position trade equities, so I keep a 1- and 2-minute chart of the NQ and ES at all time on small charts on the second page (with the first page being my scanning page I use primarily for stocks). Then I have a 2-, 5- and 15-minute all sessions chart for both the NQ and ES attached to the two level IIs on the second monitor. Then on the third page, I have 5-minute $compx and $spx charts as well we my YM charts and then at the bottom of the page I have a 15- and 30-minute intraday chart of the NQ and ES (overlapped). So, you can see a pretty decent mixture of intraday and all sessions charts. If you want, you can also check out the QQQQ and SPY from time to time to see how they compare. With both, you will find they stall at whole and half numbers so if you see them coming up into such a number you can more likely expect a stall.

One thing that I think is very important to keep in mind when you are setting up your own charts is consistency. It is imperative that you are able to compare current market action to past market action. If your charts vary a great deal in their comparable dimensions, you will not be able to make logical comparisons. All of my charts are about 2x4 - two units high to four units wide. This way I can look at a chart of XYZ and see a rally at a 45% angle and be able to recognize that as an average move, as opposed to something at a 20% angle which would tend to be below average. These will be a bit different for everyone though, so it is very important to not spend too much time flipping to different trading page setups all the time. Find something that works for you and just stick to it.

P.S. I'd love to receive feedback from you. Please leave a comment or discuss the article by clicking on "Make a comment on this article" below.

Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.