what is the most honest indicator?
- Thread starter cruz
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Indicators cannot lie, they just show what they calculate. But the chart itself is the best indicator if you mean the accuracy of data.
Fib, s has to fall into being very honest, and most of the time mis-used
I agree with Enivid however,
Hi Cruz,
I hope that you realize that there is no indicator whatsoever that can predict the future. You have to understand that the role of the indicators is as they sound- to indicate. They help you to put together pieces of information to one big picture, but it is you that has to analyze the charts and make the call. Making decisions according to an indicator’s call is a common mistake that will make you lose your money. My advice to you is to try trading with “naked” charts, meaning clean charts without any indicators. By doing that you will learn the different behaviors of the currencies and how they respond to price changes (which is the job of the indicators). When you are skilled enough, you can add the indicators, but then their weight in your decision process will be lighter. As for myself, I like to use 20, 50 & 200 MA , Fibonacci and stochastic.
I hope that you realize that there is no indicator whatsoever that can predict the future. You have to understand that the role of the indicators is as they sound- to indicate. They help you to put together pieces of information to one big picture, but it is you that has to analyze the charts and make the call. Making decisions according to an indicator’s call is a common mistake that will make you lose your money. My advice to you is to try trading with “naked” charts, meaning clean charts without any indicators. By doing that you will learn the different behaviors of the currencies and how they respond to price changes (which is the job of the indicators). When you are skilled enough, you can add the indicators, but then their weight in your decision process will be lighter. As for myself, I like to use 20, 50 & 200 MA , Fibonacci and stochastic.
I agree with all of you. There is no indicator that can predict the future. One of the best things for me are trendlines. I base everything off of them and the indicators that I do use need to support what the trend is. It also helps me get in or out at a better price. The chart below is a prime example of what I am talking about.
Brilliantly well put point. The real decisions are taken while at the helm of a forex trading robot or chart by an agent, and not through indicators!
Indicators, whether for FX, Futures, or stocks, can only do one thing and that is give a rough idea of what "May" happen when a certain price movement occurs.
I have found that certain indicaters work really geat for verifying certain price patterns. ie:
You can use an MACD, for example, to show if a price pattern might take off or flop. If that MACD converges with the pattern then, ie. a Bull Flag, there is a pretty good chance that a break-out of the flag may continue up. However, if the MACD diverges with the price movement of the Bull Flag then there is a pretty good chance that the break-out is false.
This holds with most of the popular price patterns.
I set my own standard a number of years ago that there must be 3 confirming indicators before trading a forming price pattern.
One example stands out.
A double top, AKA, Head and Shoulders. If the indicators diverge with the price movement, the 2nd shouldsr, then a break to the down side is quite possible. No guarantees, but possible.
Is it perfect? Of Course!
but the indicators do tend to help picking good trades and throwing out bad ones.
Price patterns and indicators are a trading subject unto them selves but it's still a great way to trade.
RT...
I have found that certain indicaters work really geat for verifying certain price patterns. ie:
- Bull Flags
- Bear Flags
- The "Famous" 1-2-3 pattern
You can use an MACD, for example, to show if a price pattern might take off or flop. If that MACD converges with the pattern then, ie. a Bull Flag, there is a pretty good chance that a break-out of the flag may continue up. However, if the MACD diverges with the price movement of the Bull Flag then there is a pretty good chance that the break-out is false.
This holds with most of the popular price patterns.
I set my own standard a number of years ago that there must be 3 confirming indicators before trading a forming price pattern.
One example stands out.
A double top, AKA, Head and Shoulders. If the indicators diverge with the price movement, the 2nd shouldsr, then a break to the down side is quite possible. No guarantees, but possible.
Is it perfect? Of Course!
but the indicators do tend to help picking good trades and throwing out bad ones. Price patterns and indicators are a trading subject unto them selves but it's still a great way to trade.
RT...
I would say this depends what you want?
- Are you interested in the strength of the trend try ADX,
- Do you want to know about some range and its assigned probability try Bollinger bands or any other band/stochastic type indicator.
- Do you want whether a trend exits or the direction, try derivates of Moving averages, Volume based ones and so on...
- Are you interested in the strength of the trend try ADX,
- Do you want to know about some range and its assigned probability try Bollinger bands or any other band/stochastic type indicator.
- Do you want whether a trend exits or the direction, try derivates of Moving averages, Volume based ones and so on...
Try Bollinger Bands and Accelerator aka AC. trade in 4H and higher
Tell me what you think after you test it
FarrisFahad
Tell me what you think after you test it
FarrisFahad
Fibonacci is not an indicator. The question is hard to answer cause not sure what you mean by honest indicator.
Most Honest Indicator
Thats funny but the answer is one that you can use and consistently get a profit from. I am an oscillator guy specifically slow stochastics. Thats just waht I have used am comfortable with and have had the best result with. I would say the best thing to do is experiment with different technical indicators. Dont just use the default parameters either. Plug in your own values until you get it dialed in just the way you like.
Thats funny but the answer is one that you can use and consistently get a profit from. I am an oscillator guy specifically slow stochastics. Thats just waht I have used am comfortable with and have had the best result with. I would say the best thing to do is experiment with different technical indicators. Dont just use the default parameters either. Plug in your own values until you get it dialed in just the way you like.
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