Indicators 101


hey there just my thoughts on indicators whilst answering a post on a forum ............ indicators take a lot of grief from traders who dont know how to use them effectively the main complaint is :- " ALL Indicators are Lagging ..........." well i have news for all traders .................. everything regarding signals in trading is lagging...........the next bar direction , tick size or whatever you use to identify HISTORIC price activity ...........is unknown....so indicators are part of the same issue.....traders just create an illusion that they have more immediate signals and patterns ..........but thats an illusion im afraid......we are all in the dark on what happens next ...so dont fool yourselves into a delusional confidence that has no right to exist ............, other thoughts on indicators .......... 1) theres a lot of ineffective ones that dont do what they are trying to do 2) theres a lot of multi purpose indicators that try to do too much (jack of all trades) 3) theres a lot of Indicators that traders use in the wrong way I would say identify what you actually want from the indicator current directional Bias current Volatility of instrument current momentum/strength of Instrument then find an indicator / setting that identifies these SEPERATELY ........please please dont do a 1 size fits all .........the swiss army knife indicators out there that have been paraded for decades are not sometimes as good as they seem but thats just me guys ..........my opinion....let me know what you think ? good hunting Neil NVP


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