This Week's Question: What’s the One Indicator or Tool You Can’t Trade Without?

Trading Discussion
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True, this.

Can I nominate Ichimoku Kinko Hyo as the second most misused?

There are people trying to sound like experts on Ichimoku, writing (self-published) books, and talking on Youtube about it, who are teaching people to use it for forex trading with the daily, stock-trading settings from the former 6-day week!! :stuck_out_tongue_closed_eyes:

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I currently use 2 different indicators, in combination with classic PA.

First one, which a BP member turned me on to years ago, is the Ichimoku Cloud. But only the lagging span, everything else is turned off. This mimics price in line form (instead of candles or bars) and lags behind, reducing clutter. I use this as a visual to find S&R levels, or break and retest areas within a trend.

Second one, also learned from a BP member recently (you all probably know who) is the SMA 10 & 50 (okay, maybe that counts as 2 indicators?) which clearly shows the swing high/low points on different TF’s, giving me a better visual of current and longer term trends at a glance. It’s also easier to spot certain patterns such as double tops/bottoms, H&S, etc.

Also, a shout out to the 20 EMA which I use as part of a screener for stock picking each weekend. I’ll only look at stocks which price has crossed this level (among other settings). This gets me in an existing trend and helps keep me from trying to trade reversals, so price has to either cross and close above or below.

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Thanks to all making this thread interesting. I can kill my boredom here. I’m testing my robot in ByBit until it’s rusting my neck. :grin: I’m also very happy to popularize thread by Mrs. @Penelopip.

I just want add my view about how to use indicator. There is no correct or wrong way to use an indicator. Everything relies on the person who is using it. RSI as an example, when you use it on weaker TF, it helps us to show momentum, overbought / oversold.
When we use on stronger TF, it’s more accurate for us to treat it as trend indication. Different instrument will have different configuration. Example, RSI on XAU will react differently compare to EURUSD.

Here is the example of real use of RSI,

  1. Overbough/sold on H1 chart, major pair.
  2. Trend indication when appy on HTF, such as H1 and above.
  3. Reversal by waiting for Convergence / Divergence.
  4. Pullback after trend has been confirmed.
  5. Breakout by looking at top/bottom
  6. Volatility by looking at the difference of last n top/bottom
  7. Forcasting next market range from previous momentum.
  8. … many more.

The articles about RSI mostly cover only 1, 2 and 3. So there are a many more ways to use RSI. I use RSI with more then 20 methods. The more we understand about an indicator, we will know more how to use it.

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Hey everyone! This is my first time using this forum. It is nice seeing all your responses! I’ll have to try some of them out sometime. I’ve been using only two currently. Both are by this author, Luxalgo. The 1st indicator is Luxalgo’s Smart Money Concepts (SMC). I find this one useful because it visually points out when price Breaks Structure (BOS) or Changes Character (CHoCH). My 2nd indicator is Luxalgo’s Envelope Strategy. I can depend on any rebounds in price when it hits the envelope. Nice small profits :slight_smile:
I am still developing a reliable trading strategy to make consistent profits! Thank you, Babypips, for everything you do <3