Do all oscillators have similar plots?

[apdusp]

I was verifying this oscillator
https://usethinkscript.com/threads/nadaraya-watson-oscillator-for-thinkorswim.15070/
while comparing with a very simple indicator I constructed with 2 RSIs (9,14) and a linear regression (50) and was struck by the visual resemblance, including the crossings. do all roads lead to Rome?

 

[MerryDay]

@samer800, you did an outstanding job in the conversion. you deserve standing ovation !!! I was verifying this oscillator while comparing with a very simple indicator I constructed with 2 RSIs (9,14) and a linear regression (50) and was struck by the visual resemblance, including the crossings. do all roads lead to Rome?View attachment 18908

No, not all roads lead to Rome. But all collinear indicators do.
https://usethinkscript.com/threads/...nt-to-successful-trading-in-thinkorswim.6114/
In this case, both indicators are measuring the speed of price movements.
When you measure the same thing, it is not unusual that the results are similar.

This is why when building a sound strategy, one needs to use non-collinear indicators.
Many n00b traders put 4 odometers onto their charts thinking that when they all read 60mph that it is the holy grail and a sign from the gods.
Momentum oscillators when set with corresponding inputs will have corresponding outputs.

read more: https://usethinkscript.com/threads/basics-for-developing-a-good-strategy.8058/

 

[apdusp]

No, not all roads lead to Rome. But all collinear indicators do.
https://usethinkscript.com/threads/...nt-to-successful-trading-in-thinkorswim.6114/
In this case, both indicators are measuring the speed of price movements.

This is why when building a sound strategy, one needs to use non-collinear indicators.
Many n00b traders put 4 odometers onto their charts thinking that when they all match that it is a sign from the gods.

read more: https://usethinkscript.com/threads/basics-for-developing-a-good-strategy.8058/

I really appreciate your very important explanation. I was not aware of the fact you point out, at least not conceptually, and this will force me to review the indicators I use, my way of setting up the chart and how to look at a chart. Now, I realize that 2 important trading systems I follow are now, to me, clearly based in that non-collinear concept and I will mention them for those who know them or are interested:

The simplest one, Vectorvest DEW trading system, which consists of:

-Detrended Price Oscillator (DPO) for cycle confirmation,

-Price Envelopes for volatility and

-Weighted MA for trend with very simple rules to apply,

and as optional, uses in addition to that, MACD for trend and a custom S/R indicator.


and to my preference, Didi trading system, which uses different indicators for entries and exits:

-ADX/DMI to point trend or no-trend, S/R prices, and times the initial stage for closing a trade

-Didi Index, based on 3 simple MAs, to point for confirming entries (long/short) and eventual extreme exits

-Bollinger Bands (BB) openings for timing the entry and closing bands for exits

-Stochastic in agreement with TRIX to close

In summary:

Entry: ADX/DMI + Didi Index + BB

Exit: ADX + Stochastic + TRIX + BB

PS: I don't like Volume based indicators as I follow SPX and NDX