The best indicators

[trade2live]

Is there any such thing as best indicator? or are they just good for specific purposes? Most people prefer using the bollinger band and a combination of other indicators. Are combinations the best idea? do they not conflict and confuse a trader?

[Reealjrd]

Is there any such thing as best indicator? or are they just good for specific purposes? Most people prefer using the bollinger band and a combination of other indicators. Are combinations the best idea? do they not conflict and confuse a trader?

All Indicators are good but everyone can not be used for evry type of trading. Combination of indicators is good, that should be used as per the situation and uses of indicators are very important, which you can learn from some forex web sites like babpips.com, stockcharts.com. Visit on these sites you will find the proper information about forex.

[chinexex]

Is there any such thing as best indicator? or are they just good for specific purposes? Most people prefer using the bollinger band and a combination of other indicators. Are combinations the best idea? do they not conflict and confuse a trader?

@ trade2live,

indicators were designed to help traders analyze the market and not to predict it. so i do not believe in any such thing as 'best indicator'. like the poster above said, the choice of an indicators depends on the trader's trading strategy.

Apart from bollinger band, there are other nice indicators such as RSI,MA,STOCHASTIC etc. a combination of 2 or 3 will be okay but when you make use of mutiple indicators (especially in designing an E.A), it can counter-balance/confuse your decision making.

all Indicators are good but everyone can not be used for evry type of trading. Combination of indicators is good, that should be used as per the situation and uses of indicators are very important, which you can learn from some forex web sites like babpips.com, stockcharts.com. Visit on these sites you will find the proper information about forex.

@ reealjrd,

the use of indicators could be helpful in trading but may not be of much importances because they do not determine the market trend/situation rather the market determines the movement of the indicators.

i do not make use of indicators on my chart except for E.A programming.

as per the site u prescribed (i.e babypips)........i recommended it!

[DollarBull]

Is there any such thing as best indicator? or are they just good for specific purposes? Most people prefer using the bollinger band and a combination of other indicators. Are combinations the best idea? do they not conflict and confuse a trader?

Every indicator, when run for a longer time intervals, is better than itself over shorter time intervals.

RSI 1 hour is much superior to RSI 1 min.
CCI 1 hour is far better than CCI 5 min.
MACD sucks but still MACD 1 hour is far far better than MACD 15 min.

Remember, all of the indicators are based on historical data and therefore not truly independent of each other. So, a combination of indicators is not necessarily better than a single indicator. It has to do more with how you optimize the indicator for your own circumstances (e.g. timescales over which you want to trade, your risk tolerance, how much money you invest, your profit goals etc).

[mydkri]

I think every indicator is very good but depends on how you familiar and make the best of it.

It's like you make your decision based on statistical data which is (for me) better than guessing.

Sometime, too many indicators at a time can make you confused. Try to make it simple for you so it will make you life simple.

[ELEWODE]

I donn't support that idea that one indicator is the best they can also fail,but make sure you are after the time of there profit,

Therefore I can say all the indicators have similar traits

Weither you purchase it or it is free,does not matter,the only thing is your experience with it,that is the reasons most traders combine indicators

[comptech]

Is there any such thing as best indicator? or are they just good for specific purposes? Most people prefer using the bollinger band and a combination of other indicators. Are combinations the best idea? do they not conflict and confuse a trader?

I believe all indicators are both good n bad. it depends on how lucky you are and the type of trader you are.

[764]

indicators were designed to help traders analyze the market and not to predict it.

i agree with it... indicators is just for help u fine a direction... where it's now not what it's the next of it... i trade based on methods which ride the indicators

feel the game not to thinks what it's

[forexboy]

Why do they say that all indicators are "lagging indicators"?

[lizerzoltan]

Because they use the past price data to give you their values.
Ie: a RSI by default use a 14 days period in MT4, meaning the last 14 candle give you the value...but that is always show only how it was the price moving, thus lagging indicator....although i believe there is good predicting chance with this as well

[getpaid2trade.com]

All indicators are based on either a study of price or volume, so in my eyes one of the best indicators to follow is that of tick volume combined with bar/candle stick pattern recognition.

I have a post in the strategies folder in regards to the VSA/Better Volume indicators, and a guide on how to read the bar formations for trade entry and exit.

[DollarBull]

Why do they say that all indicators are "lagging indicators"?

It is a good question and most beginners must understand it well.

All Technical indicators are based on historical data, therefore they are called "lagging indicators".

But there are indicators in the fundamental side that are both "lagging" and "leading" indicators.

Any indicator based on past data is "lagging".
Any indicator that can help forecast a future data with more confidence, is "leading data".

An example of "leading indicator" would be "building permits". A city gives permits to certain number of homes to be built. If that number goes up it foretells the upcoming construction activity and therefore, businesses in construction sector will do well. Even though the number of building permit itself is historical data (say, number of permits issued in July) it can clearly forecast the future activity in a sector.

There are many many leading indicators in the markets - some are global, some are local. For example "baltic sea index" is a measure of how many ships cross the baltic sea and if this number goes up it tells us about upcoming some business activity. Manufacturing orders (orders that have not yet been implemented) tells us about how factories will perform in coming months. Monsoon rain in India will tell us about what will happen to agriculture in that country. Thus, you can also create your own 'leading indicators'. Leading indicators are very useful as long term strategy. Lagging indicators have only a limited potential to be successful.

[korelat]

I think CCI is very good indicator..

[WAK_CAP]

i think stocasthic is very good indicator. combination with fibo ret will be perfect system.

[joeboy]

Almost all indicators are based on historical price data. Hence, there's always a lagging effect on these indicators. The best i've found so far is to trade naked. Price action rules. For the non-price based indicators, (e.g;accumulation/distribution) they always seems to miss the important trade, and hence they are worthless to me. Would be glad if someone can show me otherwise (that non-price based indicators can be used to improve an entry/exit signal)