Which technical indicator made the least sense to you? I am not asking if they work or not and I really don’t use indicators with the occasional look at RSI, but when I looked into just about all the indicators there where a few which to me made little sense and I knew they would never be part of my trading toolset.
Now, just because I don’t like them does not mean they are bad or do not work. I think every technical indicator can be beneficial if you understand hoe to use it. The Ichimoku Cloud was definitely the one that from the start I did not like and in my book is the one that makes the least sense.
I’m with you, with regards to Ichimoku Cloud. I think the best part of it, is that it looks complicated to understand, so most traders will give up before they start. A trader whose opinion I have a lot of respect for said the cloud is a complete system and if the cloud is used on a higher time frame it will actually predict where price is going. Which of course is not true and after a few months of testing, my opinion never changed.
I think indicators are the same as trading strategies; good or bad depending on how you apply them. One big problem I see that traders, and not only new traders don’t take the time to learn about a particular indicator before they use it or get rid of it.
Take every ones favorites: PA, Candles, RSI, ADX,MACD,MA,BB Stochastics, etc along with all the rest will all give you different outcomes and in most cases drastic outcomes, depending on your settings and how you’re using it. So if you’re not sure whether you’re a scalper, day, swing or position trader or what you want the indicator to do, how would you know how to set or use the indicator you’re looking at. For example if I’m planning on trading the lower time frames, I shouldn’t call a 400 SMA useless, how I’m using it is useless. I think if you’re looking for an indicator to confirm the trend, first make sure you’re using an indicator that was designed to respond to the trend
There are so many strategies out there that I don’t have to know how to trade everyone, I need to fully know mine as it works for me. As I pointed out I don’t really use indicators except the RSI and O also said just because I don’t like an indicator does not mean it is bad.
I always thought the Aroon Oscillator was goofy looking. It may be the best indicator ever created but I have never bothered to try to learn much about it just because of the way it looks – it is almost seizure inducing.
It also depends on the environment. SMAs and trend-following systems work best on trending scenarios while oscillators work well on ranging pairs. It’s a matter of being flexible and a lot of mixing and matching
