Do Indicators Help or Hinder? | Forex Factory

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Do Indicators Help or Hinder?

  • #1
  • First Post: Jun 27, 2017 5:06pm Jun 27, 2017 5:06pm
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  • #2
  • Jun 27, 2017 5:23pm Jun 27, 2017 5:23pm
Without price there are no indicators. You can trade without indicators but you cannot trade without price.
You came here for the truth and let me unveil it for you
  • #3
  • Jul 1, 2017 9:02pm Jul 1, 2017 9:02pm
The only universal and most precise indicator in measuring price changes, is the %
That's why i use it.
  • #4
  • Jul 1, 2017 9:13pm Jul 1, 2017 9:13pm
As long as you know how to use indicators... and intelligent enough to know which indicators works for you.

However if you only use indicators alone without any other factors to consider.... eventually the indicators will work against you ; )-
Since Frank Sinatra sings in his own way, my chart sing... I did it, my way
  • #5
  • Jul 2, 2017 5:52am Jul 2, 2017 5:52am
Depends. You need macd to be the exact right portion with stochastics. 5-8 stochastics with a 61.8 fibbonacci can be good BUT if you add bolinger bands it may hinder it. Also renko and range bars MUST not hinder the macd. For this to happen you NEED CCI and MUST only ever breakout when fib is higher than 50 never below. If you are bot breakout trading ADD BOLINGER BANDS but dont use fibs or stochastics as the hinder it. Then you have the 200MA indicator. THIS IS VERY IMPORTANT. Never use a 180 SMA with 200EMA. Simple and exponential never mix and create false breakouts. BUT if you want to find the false breakout so you can then trade the reversal ACTUAL breakout youll actually need them WITH THE AFOREMENTIONED BREAKOUT STRATEGY. (Fibs above 50)
  • #6
  • Jul 2, 2017 7:01am Jul 2, 2017 7:01am
Do YOU have the intellectual capacity to use indicators in an appropriate manner ?
  • #7
  • Jul 2, 2017 7:23am Jul 2, 2017 7:23am
It really does depend how you use them. I'll give you an example.

A simple SMA cross doesn't tell us much in itself, we have to understand what is happening to make the cross. If the price moves enough for the SMA to cross quickly, and the price is finishing on the other side of it, this can give us an idea that there is good momentum in the market. Now, is this enough to enter a trade? No, it is not.

Now you need to understand where the movement is coming from, or if it's a continuation and make a judgement that it's going to continue; a small news event might have a 1 minute impact, but news or an event with a larger impact may change movement for that day.

Trading cannot depend on a single indicator, or any single piece of information. You need to understand the flow, and follow it the best you can using all of your information available.
  • #8
  • Jul 2, 2017 8:32am Jul 2, 2017 8:32am
Quoting Catch-22
It really does depend how you use them. I'll give you an example. A simple SMA cross doesn't tell us much in itself, we have to understand what is happening to make the cross.
But candles dancing around and crossing a moving averge it's everything there is to this type of approach. And what is happening is either price moves up or down.
Quoting Catch-22
If the price moves enough for the SMA to cross quickly, and the price is finishing on the other side of it, this can give us an idea that there is good momentum in the market. Now, is this enough to enter a trade? No, it is not.
So you lay out an idea of a moving average trading but you then claim it doesn't work.
Quoting Catch-22
Trading cannot depend on a single indicator, or any single piece of information. You need to understand the flow, and follow it the best you can using all of your information available.
Yes you need to learn to dance with the market, right?
  • #9
  • Jul 2, 2017 10:14am Jul 2, 2017 10:14am
Quoting player1pl
{quote} But candles dancing around and crossing a moving averge it's everything there is to this type of approach. And what is happening is either price moves up or down. {quote} So you lay out an idea of a moving average trading but you then claim it doesn't work. {quote} Yes you need to learn to dance with the market, right?

What I am saying, if I need to explain myself further, is that the indicator signal in itself doesn't mean much unless we are looking for it to show us a specific type of behaviour, something real and economic in the market. If you are just watching the pretty lines and buying and selling, then I think they totally hinder.
  • #10
  • Jul 2, 2017 10:27am Jul 2, 2017 10:27am
Quoting RondaRousey
Without price there are no indicators. You can trade without indicators but you cannot trade without price.
Well said.
  • #11
  • Jul 2, 2017 11:25am Jul 2, 2017 11:25am
Quoting RondaRousey
Without price there are no indicators. You can trade without indicators but you cannot trade without price.
Absolutely.

Leaving aside some volume based indicators in the equity markets, all the standard indicators are lagging derivatives of price. None test out better than random over the long haul, except for moving averages as a basic indicator of trend. Due to inherent market noise even they are still random for strategies such as moving average crossover, etc.

The trend is your best friend. If you trade almost any strategy with the trend you are likely to reliably achieve a success rate of over 50% on a simple 1:1 reward:risk ratio. You will be more than OK. If you can do that with a ratio of better than 1:1 you will do fantastically. It's not rocket science but you do need excellent discipline, consistency, risk control and money management.
  • #12
  • Jul 2, 2017 11:36am Jul 2, 2017 11:36am
In my opinion, neither. Indicators vs. pure price action are just two different styles of trading. Both can be mastered and used effectively. I don't buy into one being better than the other. Both have strengths and weakness and as long as you are aware of the benefits and drawbacks of each, you can be successful using either one. For example, indicators are mathematical in nature. Therefore than can be programmed more easily and will perform consistently to design every single time. Price action on the other hand is highly subjective to interpretation, so it is more difficult to backtest and program as a result. The advantage that price action has over indicators is earlier entry, and potentially higher accuracy. All this varies widely based on the experience of the user. Indicators can be slower to react to price changes and due to the consistent nature of the signals, can cause losses when the market conditions change from the conditions to which they were adapted. Really it's just a matter of choice. It comes down to are you a more mathematical or pattern kind of person?
  • #13
  • Jul 2, 2017 11:53am Jul 2, 2017 11:53am
Quoting Madinvestor
In my opinion, neither. Indicators vs. pure price action are just two different styles of trading. Both can be mastered and used effectively. I don't buy into one being better than the other. Both have strengths and weakness and as long as you are aware of the benefits and drawbacks of each, you can be successful using either one. For example, indicators are mathematical in nature. Therefore than can be programmed more easily and will perform consistently to design every single time. Price action on the other hand is highly subjective to interpretation,...
Like that, very well put!
  • #14
  • Jul 3, 2017 5:35am Jul 3, 2017 5:35am
In my honest opinion, I believe that Most indicators are there to confuses and make you fall into the trap. The truth is only the most basic indicator have any merit, the complex one's like Ichimuko are open to so many different interpretations, so people who use them can change the rules to suite the need of the current market
  • #15
  • Jul 5, 2017 1:19am Jul 5, 2017 1:19am
Hi, guys!
I see you have very different l opinions on what use we gain from indicators..... As I'm new to trading I'm sticking with the basics MA and MACD... Can you recommend me any indicators to begin with and how to use them?
  • #16
  • Last Post: Jul 5, 2017 8:31am Jul 5, 2017 8:31am
I believe that if the indicators are used to confirm what is expected in price action, they are beneficial and useful. As mentioned above by one of the members, using indicators alone for trades is not something that generally leads to success in the long term.

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