I’ve decided to try out a few forex indicators to see which ones work best for me.
Any suggestions? Thanks
Nope, save your self the hastle and learn price action.
Try mastering Fibonacci retracements over different time frames in conjunction with drawing your own Support and Resistance lines. Let us know how you get on with that.
It depends what you’re looking for. Different indicators do different things. There are trend indicators, volatility, momentum, cycle, supply and demand, support & resistance,I, alerts, positon size, candle pattern. So if you’re specific as to what you want the indicator you will get a better response. You can also search each type of indicator. Example if you search trend indicators, you’ll get loads to look at.
Hi, heard good things about Scalp-System promise from 50 Pip a day.
I agree with pipwhip.
Indicators are wonderful tools for showing you exactly
[I]what you should have done[/I] four hours ago, or yesterday, or last week.
I agree with the above posters, but I still think that it would be good to give the OP some suggestions and leave it to him to decide whether that is helpful to him or not.
I agree. I used a ton of indicators when I started for every part of a trade; trend momentum cycle support resistance etc. And like Clint said they’re great to see where price has been. Now I use a SMA, fibonacci retracement and extention. But all those indicators helped me to understand trend, momentum, cycle, etc. I think in the beginning if someone doesn’t understand price action and how or why it moves, indicators can help to learn.
You’re right. And I agree with your suggestions: [B]Fibonacci retracement levels,[/B] and [B]support and resistance levels.[/B] I use both. They are sometimes referred to as price-measurement tools, rather than indicators. But, they are, in fact, indicators — because, like all indicators, they purport to tell us something about the future by projecting past prices (or derivatives of past prices) beyond the right edge of our charts.
And that projection of past prices (or price derivatives) into the future is precisely what defines an indicator.
I rely on another indicator which generally is not thought of as an indicator — [B]trend-lines[/B]. Like all indicators, trend-lines (and their cousins, trend-channels) describe what has already occurred on the left side of our charts.
Indicators can’t [I]predict[/I] the future. The only reliable predictor of the future is a crystal ball.
Sadly, mine got smashed to bits.
I just wanted to give a bit of colour as to why people here are little bit anti-indicators. Its not that they dont work, its just a lot of us have lost a lot of time in the search for the ultimate set of indicators. There are a lot of different individual indicators, each indicator can be paramerterised in various ways and to make them work you normally need a set of them to confirm each other.
You can lose a lot of time to this as you have the curse of dimensionality. If you say there are 50 indicators of which each can be parameterised in 3 ways there are 150 different indicators. If you trade using 3 of them together that gives you 551,300 different combinations you could use. Its just a lot of search out and would take you an impossible amount of time and money to get them all.
If youre experienced then you can reduce the search space as there are huristical ways to make this search quicker but the odds of finding the perfect set are really against you.
Now go learn S&R, swing points, fib and PA!!!
I think as usual with just about anything, it depends on your definition of lost or wasted time. As I said before when you search for example a pivot point indicator, you don’t only learn about the indicator. you also learn about pivot points. Same with S&R and PA.
I agree with everyone here and add that I subscribe to what Michael Boutros (DailyFX/FXCM), in an Expo presentation, called ‘paralysis by analysis’: this occurs when a trader’s screen is plastered with so many indicators that price action is barely visible.
I also think that using one indicator over different time frames, and comparing one currency pair to related ones (e.g. if you were trading EUR/USD and spotted a bear trend, you could compare this pair to EUR/GBP, EUR/USD, EUR/JPY, EUR/AUD and so on, to see if there were a unilateral Euro-based bear trend across the board or if it were more of a Dollar-driven move), are simple but effective ways to get a signal or to shape a trading bias.
Again, it also depends on what sort of trader you are, but, again, even scalpers or small-timeframe traders will keep an eye on the longer time frames to see what the bigger trend direction is for that pair.
Happy trading.
Ps - Here is a useful article about comparing indicator profitability:What is the Most Profitable Indicator? | Common Chart Indicators | Elementary
Great post and Great Article. I’m a big fan of Michael Boutros, I don’t agree with paralysis by analysis, especially when you first start out. I think you use as much or as little analysis as you need to understand trading in the forex. For some it comes earlier than others. When I started, I used 2MA’s, Trend indicator, 2 candles Heiken Ashi simple and Heiken Ashi smoothed, 1 volatility, 1 momentum, support and resistance indicators, position % and a pattern change indicator. On top I verified with with the cloud and another template of different indicators. Now, I use my eye, PA, Fibonacci Retracements and Extensions. I used all those indicators to help me try to pick tops and bottoms of price movement, as I gained experience I learned that it’s more important to make a profit not try to pick beginnings or ends or price movement. So for my money use as much or as little as you need to, too get the job done and along with what the indicator, indicates liarn why that indication is important in your trading.
I was surprised with the results of the back test. But absolutely true. Best example RSI and Stochastic using by themselves instead of using them for confirmation with price and other indicators. Again great post and great article.
Gp
I think maybe more like this. Im embarrassed to even show this now that I look at it. :30:
From above I’m to this
Like I said whatever it takes to get the job done.
wow. certainly got a variety of responses…mostly I get the feeling that you don’t really like using indicators. So why do so many analysts use them and praise them to the hilts?
This is a very interesting question. I would say its becuase it makes a better sales pitch when they are pushing systems on to noobs. Think about ridiculious diets that get pushed. You couldn’t really sell a diet that is simple such as eat less and exercise, it has to be jazzed up, add some fake science etc. I think indicators are really good at this, its faux science and gives a sense to the lay person that it will be a good system. It cant be real science or people wont understand it, it just has to be enough that its simple to enough to understand and looks impressive.
QUOTE=Energized;595010]wow. certainly got a variety of responses…mostly I get the feeling that you don’t really like using indicators. So why do so many analysts use them and praise them to the hilts?[/QUOTE]
My opinion differs from my friend PipWhip. I’m not saying he’s incorrect, because in a lot of cases he is. There are some not only newbies but newer traders that don’t want to put in the work, and like the diet example they buy into the “secret indicator released for the 1st time, or the trade like the big boys” etc. But I also believe that analysts have a lot more tools to draw from than us down here at the bottom of the food chain. They have teams that specialize in different parts of the equation, that they can draw from. Most retail traders do not have access to teams of economists etc., what we do have is indicators.
Companies know that generly people do business with people they: know, like and trust. Think about any thing you have used in trading. . .in most cases what you are using, you didn’t pick up from someone you didn’t like or trust, more than likely it was from someone you did like and trust somewhat. Look at especially some of the price action threads here, people who follow them somewhat know op’s, like and trust them. Don’t do this but take my word for it; watch their threads and see what happens when someone goes their and flames them.
Analysts make their decisions that create the movement in the market. We make our decisions after the fact and use indicators to help us with our decisions. Some need more than others; it goes from pure PA to loadem up . The dealers want your business so they offer webinares, seminars, video’s, signals etc. But the purpose is to help you make better decisions but for sure a big part wants you to make a decision to trade with them. Like I said that’s just my opinion.
Gp
Well, pipwhip raises an important question: to what degree do indicators make for better trading? When I took my motorcycle test, I knew that even if I was wearing the same leathers as any professional MotoGP racer, there was
an ocean of difference between us. However, without that confidence of good quality protection in case of a low-side spill,
I would not have been so comfortable or able to focus on riding; I did actually have a low-side during training, but the protection made me get up and carry on; had I had a pair of jeans and cheap gloves on, it would have been much more serious.
So the tools give you the confidence to build your skill up and, while they do not prevent accidents or replace experience, they certain help you.
For me, I would say that,because I trade a lot from my smartphone, I do not have a lot of room to cram indicators on the screen, so I tend to just use support/resistance/channel/trend lines, including Fibonacci retracements; at the bottom of the chart, I will have the ATR (Average True Range), to help me pick Stop and Limits according to each pair’s movement.
However, I will still occasionally bring up additional inidicators for comparison, for example RSI (Relative Strength Index) to see how ‘oversold’ or ‘overbought’ a pair seems to be on longer time-frames (e.g. monthly), historically… That is just one example, but I could quote others.
Everyone trades differently - what works for one person may or may not work for another…
What indicators do you use?
Have you try an ichmimoku indicator? i think this indicator can predict the trend more accurate than other’s.