I wouldnt buy just because an oscillating indicator is in oversold territory. If it was this easy, everyone would be making money.
In my opinion, these indicators are distracting and unreliable.
I started by layering my charts with all sorts of indicators. Whenever they indicated a buy or sell, I would enter but the price would reverse immediately and run straight to my stop loss. Then the price would return to my entry price and this cycle would consistently repeat itself.
I came to the conclusion that trading with indicators was costly, so I got rid of everything.
1 Like
If you want to confirm a move look at something correlated that has centralised volume data, such as the MSCI Mexico ETF or the CME Mexican Peso futures; here is a screenshot of the daily timeframe for the latter:
The chart being the reverse of USD/MXN, the last three candles are red whereas in USD/MXN they would be green: what is interesting is that the start of the move was characterised by strong selling volume matched by a substantial red candle, whereas by the last candle we can see a mismatch between selling volume and the actual candle with a significant tail/retracement, signalling a possible exhaustion of the move.
This is how I confirm spot forex moves, namely by checking what currency futures and their volume data (which is centralised) are telling me.
I hope this helps a little bit…
Happy trading.
1 Like
