Indicators question

alexflemj

Active Trader
Nov 9, 2011
69
1
27
I have started trading on the financial markets since a couple of months. In my opinion, technical analysis seems to be a good way to forecast the price movements. Can someone more experienced tell me whether it is a good idea to use indicators for receiving buy/sell signals or it is better to use the support/resistance levels and trend lines?
 

Sumita

Trader
Dec 21, 2015
20
2
9
40
Hello Alex,

I dont consider myself experienced to be an experienced one, but I hope it might help you out.
Technical analysis is sure a good way to trade where you take confirmation from the technical indicators regarding the current trend.
When I do technical analysis, trend lines and some key technical indicators like EMAs, RSI, MACD and BB help me out to figure out the upcoming trend and price action. While it will be advisable if you make use of fundamental analysis as well to predict the price actions better.
However, there are some ace traders like my mentor who just through the chart formation (keeping in mind the fundamental analysis) can predict the long-term perspective of a forex instrument. :)
 

Enivid

Administrator
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Nov 30, 2008
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www.earnforex.com
I would not rely on indicators for buy/sell signals. In my experience, indicators are only good for answering some basic questions about the market - trend direction, trend strength, possible trade change pending. The actual signals come better from support/resistance breakouts or bounces.
 

hayseed

Master Trader
Jul 27, 2010
464
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109
usa
hayseedfx.com
In my opinion, technical analysis seems to be a good way to forecast the price movements. Can someone more experienced tell me whether it is a good idea to use indicators for receiving buy/sell signals or it is better to use the support/resistance levels and trend lines?
//-----

hey alex..... forecasting price moments might be more difficult than it appears no matter which method is employed....

there is no doubt in my mind the most ingenious ea written, at least seen by me, was written by another alex..... Alexandr A Krivoshey's 'Cyberia Trader'.... you can take his basic logic style and expand many fold to allow for unlimited '' CyberiaDecision()'s '' including indicators, support/resistance, trend lines, time, fundamentals and such....

and of course we should keep in mind..... if trading was easy from any perspective, fxcm would be trading themselves out of that 300 million hole rather than borrowing their way out......h
 

radex78

Active Trader
Nov 15, 2015
671
17
34
42
I would not rely on indicators for buy/sell signals. In my experience, indicators are only good for answering some basic questions about the market - trend direction, trend strength, possible trade change pending. The actual signals come better from support/resistance breakouts or bounces.
In my daily analysis also not relying with indicator for now, and usually prefer look on candlestick pattern on different timefarme from weekly, daily also one and four hour timeframe, and look for support resistance on chart with looking high and lowest wave
 
You should definitely use both. Support and resistance levels, as well as trend lines are very important technical analysis tools, and so are indicators. But in order to get more accurate trading signals you should combine them together. Using 2-3 indications that you trust and feel comfortable with, will increase you probabilities for winning trades.
 

radex78

Active Trader
Nov 15, 2015
671
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Still many trader will look on support and resitance area to determine their entry point and also sometime there are trader that put stop loss on these area but with certain distance of pips, and I think use indicator although use many idicator it will making confused sometime because might occur one indi already confiormed but another still waiting
 

alexflemj

Active Trader
Nov 9, 2011
69
1
27
//-----

hey alex..... forecasting price moments might be more difficult than it appears no matter which method is employed....

there is no doubt in my mind the most ingenious ea written, at least seen by me, was written by another alex..... Alexandr A Krivoshey's 'Cyberia Trader'.... you can take his basic logic style and expand many fold to allow for unlimited '' CyberiaDecision()'s '' including indicators, support/resistance, trend lines, time, fundamentals and such....

and of course we should keep in mind..... if trading was easy from any perspective, fxcm would be trading themselves out of that 300 million hole rather than borrowing their way out......h
Thank you mate. So it seems that we must combine technical indicators with trends and fundamental analysis . You said that Alexandr A Krivushey's is creating EAs , can you please give me more information? I noticed that my broker DF Markets has the option to develop indicators on your own. I haven't tried this function, yet... Are the predefined indicators correct or they should be modified? What is your opinion on this?
 

radex78

Active Trader
Nov 15, 2015
671
17
34
42
Fundamental analysis need to reading news update, I like to reading news with simple reading throuih forexfactory and look on news high impact and time updated, sometime news high imapact giving spike movement to currency and often move randomly after down quickly but not too long then bullish strongest
 

hayseed

Master Trader
Jul 27, 2010
464
128
109
usa
hayseedfx.com
Thank you mate. So it seems that we must combine technical indicators with trends and fundamental analysis . You said that Alexandr A Krivushey's is creating EAs , can you please give me more information? I noticed that my broker DF Markets has the option to develop indicators on your own. I haven't tried this function, yet... Are the predefined indicators correct or they should be modified? What is your opinion on this?
/---

hey alex..... i'm not sure what krivoshey is doing now days... my only knowledge of him is that single ea, 'Cyberia trader'....

about 10 years ago there were perhaps a dozen ,mostly russian, coders that were beginning to code more complex indicators and ea's.... i used to search daily for anything new published by them.... either code or perhaps just words.... most have now gone silent..... mladen and nikolay kostsin have stayed by far the most active.....

predefined indicators are like the one size-fits-all hats and gloves.... they really don't.... so there is nothing wrong with adjusting or stretching them slightly to fit you.... we all do it..... there is always the risk in over stretching to the point where the indicator no longer resembles the original.....

for me at least, blending both technical and fundamental helps.... there are certain pairs that today i would never short and some i would never buy no matter what the technical side said because the fundamental side says the opposite.... in a few days, weeks or months both sides might agree again and i might join them.....

technical's might move a pair 2 or 3 hundred pips but fundamentals can move it 2 or 3 thousand pips......h
 

MillerTrade

Trader
Mar 15, 2016
19
0
7
44
...for me at least, blending both technical and fundamental helps.... there are certain pairs that today i would never short and some i would never buy no matter what the technical side said because the fundamental side says the opposite.... in a few days, weeks or months both sides might agree again and i might join them.....
technical's might move a pair 2 or 3 hundred pips but fundamentals can move it 2 or 3 thousand pips......h
Hello,
I agree with hayseed. You need to make both technical and fundamental analysis. You can't totally relay on good chart conditions when i.g. a big Company in Europe declares bankruptcy. There is also the sentiment analysis where the majority of the traders believes that a certain currency will go up or down. It's something that I will have in consideration prior choosing a direction.
 

TeKiJIa

Trader
Mar 25, 2016
13
0
7
32
I am newbie. Can you please advice one more time, what indicators should i study at first?
 

hayseed

Master Trader
Jul 27, 2010
464
128
109
usa
hayseedfx.com
hey tek.... moving averages.... but you can expect many differing answers.....

take a pair and place the same style moving average on the chart..... look at the weekly chart first.... if the price is above a 'reasonable periods' moving average and the ma is moving up, as a rule the price is moving up..... if the price is below and ma is falling, as a rule the price is moving down.....

closely compare the daily and 4 hour charts to the weekly to fully understand the potential damage that can be done when they are running against the weekly....

know both the average length in pips and time that the moving average runs before a reversal..... this will only be a rough guide line but still useful..... it is also useful to know those same average 'lengths', both in pips and time, on every indicator on every pair on every timeframe......

swimming against the current will wear you out..... drift with it......h
 

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MillerTrade

Trader
Mar 15, 2016
19
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I am newbie. Can you please advice one more time, what indicators should i study at first?
Understanding technical indicators for a newbie could take a lot of time. Being a newbie, I rely on MACD and EMA indicator which makes me understand the price action in a better way.
 

myfxpt

Master Trader
Nov 13, 2012
405
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Melbourne, Australia
Fundamental analysis seeks to understand those factors that will influence price direction in the future, such as interest rates, inflation, and other key economic indicators. It is these factors that influence the supply and demand for one currency against another, so if we can understand these factors we can better understand the likely future direction of price. For example, high official interest rates in Australia against low official rates in the USA, all other factors being equal, will put upward pressure on the AUDUSD. Investors in the USA may want to borrow funds in the USA at the lower interest rate, and invest those funds at the higher rate in Australia, and to do so they will need to sell the USD and buy the AUD, hence, demand for the AUD is high, forcing the price upwards. The question is, do we really need to perform Fundamental analysis to take advantage of this?

If supply exceeds demand, prices will fall, and if demand exceeds supply, prices will rise. So if we look at a price chart, and we see that prices are rising, it must follow that demand currently exceeds supply. Conversely, if prices are falling, supply must exceed demand, and if prices are drifting sideways we can assume that supply and demand are about equal. All the Fundamental information we need to know is captured within the price action!

When supply and demand are about equal, we see the formation of consolidation zones (support and resistance). When demand exceeds supply we see the development of uptrends defined by a trendline or contained within a channel. The reverse is true when supply exceeds demand. Whether prices trend or drift sideways, there are tradeable ups and downs between support and resistance and channel lines, or breakouts beyond established support or resistance and channel lines, and this is where price action trading comes into play. If price hits resistance and begins to retrace, it's a possible sell signal. If price hits support and retraces, it's a possible buy signal. If price breaks through support, it's a possible sell signal, and if price breaks through resistance it's a possible buy signal. Simple as that!

If I were starting all over again, my focus would be on support and resistance, trendlines and channels, and watching price action when it interacts with these zones. My timeframe would be H4 and Daily, using the Daily to draw support and resistance, and H4 to draw trendlines and channels. I would trade the H4.

Trust this helps!