Indicators for beginners
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  1. #1
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    Mar 2017
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    Default Indicators for beginners

    Hello, everyone.
    I am trader-beginner and I`m interested a lot in technical analysis and indicators.
    What indicators do you use? Which ones are the best for beginners and easy to undrstand?
    I just feel, it is a very important part of trading, but it seems a bit difficult for me, don`t know what to start from

  2. #2
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    Mar 2016
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    Use as few as possible to avoid confusion. I only use the SMA to help spot trends

  3. #3
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    Quote Originally Posted by AbdulFani View Post
    What indicators do you use?

    None, myself. (I have, though, in the past.)


    Quote Originally Posted by AbdulFani View Post
    Which ones are the best for beginners and easy to undrstand?

    I strongly suspect that the ones that are best are probably the hardest to understand.

    From my earlier experiences when I used indicators, I found some components of the Ichimoku Kinko Hyo indicator-set far more useful and interesting than others, but I can't pretend that they're easy for beginners to understand - and I should also mention as a caveat that a lot of the information around online about Ichimoku (especially in forums but also even on websites dedicated to it) is really very inaccurate and misleading, and many myths abound about "how best to use it".

    I'd advise you to avoid oscillators that revolve around concepts of "overbought" and "oversold" (especially Stochastics) which can be very misleading, especially when (as most people do) you try to use them without really understanding exactly what they're measuring and why.

    Moving averages can be helpful for identifying trends, as long as you don't imagine that they represent support and resistance: it's always possible to curve-fit a moving average to support and resistance, but that signifies nothing helpful: support and resistance, in my opinion, are much more meaningfully and helpfully identified by looking at where support and resistance were than by looking at an indicator. Previous support and resistance are obective and factual: they don't need to be "identified" or "predicted" from an indicator.

    (And in case anyone imagines that I'm "having a go at technical analysis" by saying all the above, I'll mention that I'm not, at all: all my trading is TA-based - I just don't use the indicator parts of technical analysis.)

    I have a question for you also: why have you already decided, right at the start, that you want to use indicators? If it's because that's your perception of "what most people do", then it may help you to bear in mind that this is a field of endeavour in which overall success-rates, whoever's figures you believe, are strikingly low, and that "following the majority view" might therefore be unlikely to be a recipe for success? In its simplest terms, before you decide to copy what most people do, be aware that most people lose.

  4. #4
    By the way, using trading indicators is not a bad thing actually but the problem is depending on only trading indicators! I handle my live trading account based on fundamental data and statistics but till now I use moving averaging trading indicator for identifying reliable swing points of market during news sessions! That means, you need to know details about, how to use trading indicators for making better trading result!

  5. #5
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    Mar 2017
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    lexys,
    Thank you very much for your opinion, you have valuable experince.
    I just thought, that indicators will help me to make technical analysis more effectively. But now I undertand, that most of them are not precise.
    And I don`t really understand why people use MA. I Think, the directio of trend is usually visible without this indicator.
    So, you think, that succesfull traders don`t usually use indicators?
    Last edited by AbdulFani; 03-20-2017 at 09:15 AM.

  6. #6
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    Quote Originally Posted by Carlos Ray View Post
    Use as few as possible to avoid confusion. I only use the SMA to help spot trends
    And heve tried any others? How do you think, is it really important to use indicators? Or most traders don`t use them?

  7. #7
    Join Date
    Mar 2015
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    626
    First time when learn forex trading I am read simple moving average indicator, and using two sma with different variable, with rules if sma with smallest variable crossing up bigger sma that use higher setup hence time to buy and likewise, but in reality is not easy like as on theory and still facing may time loss

  8. #8
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    Quote Originally Posted by AbdulFani View Post
    I Think, the directio of trend is usually visible without this indicator.

    I agree.

    One of the "market wizards" interviewed by Jack Schwager in his book explains it very simply: he suggests that you should print the chart, pin it on your wall, stand 3 metres away from it, and see whether or not you can easily identify a trend (if you can't, there probably isn't one within the time-frame you're looking at).

    Be aware, though, that a trend exists within a specific, defined time-frame only, and that it's normal for any instrument to be trending in one direction within the specified time-frame while either not trending at all or trending in the opposite direction within a different time-frame.


    Quote Originally Posted by AbdulFani View Post
    So, you think, that succesfull traders don`t usually use indicators?

    I think that many successful traders don't, anyway, and the ones who do are using them sparingly and for very different reasons and in very different ways from most retail traders - and typically not as entry signals.

  9. #9
    Join Date
    Mar 2016
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    Quote Originally Posted by AbdulFani View Post
    And heve tried any others? How do you think, is it really important to use indicators? Or most traders don`t use them?
    Hi, I have tried others and found that I was trying to persuade myself that there were trading opportunities because it seemed the indicators said so.
    Its only when I realised that indicators can only show what has already happened in the past rather what may happen in the future, and I was better without them that my trading took off.
    SMA is useful for showing which direction a trend is in, but even with that I found I didn't need it after practice, I could see the trend without it

  10. #10
    Join Date
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    When I started FX I used to rely on the CCI Indicator (Commodity Channel Index). Works similar to a stochastic just not as complex. It has one signal line which moves between -100 and 100. Standard Period is 20, but I use to use 17 to sharpen.

    Entry signal is a break above the -100 from below (Long Signal) or a break below the 100 from above (short signal).

    Just a nice simple confirmation Indicator that I used to trade on its own to make a few nice trades.

    SMA or an EMA are great for showing weak and strong trends and also take some background noise out of the candles.

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