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Thread: What are the best technical indicators?

  1. #1
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    What are the best technical indicators?

    Trading the markets cannot possibly be imagined without the use of indicators. The first thing I noticed when I started to learn how to trade was that people use indicators. All the time.

    To this day, I'm still learning how to trade but I haven't figured out what the best indicator is. I know the use of indicators depends mostly on the strategy you're using, but really, some indicators are better than others. There are so many of them, it's hard to choose which one is going to work and which is an absolute flop.

    According to most traders and blogs that teach how to trade, I've seen that that following indicators are most popular:


    • On-balance Volume
    • Accumulation/distribution line
    • MACD
    • Bollinger Bands
    • ADX
    • RSI
    • Stochastic
    • MAs


    So I'd really like to raise the question which I'm sure has been asked a million times before. Which one, do you think, is the best indicator of them all? Or maybe, a combo, that works for you?
    Trade simple. Trade better.

  2. #2
    Market Maker Kenny's Avatar
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    Re: What are the best technical indicators?

    The thing to remember is that all technical indicators work to a certain extent but none should be used on their own. Nothing works a 100% of the time.

    The main trap that all traders tend to fall into is that they unconsciously apply indicators to their technical analysis with a positive or confirmation bias. In other words we tend to look for signals to justify an opinion on the markets that we have already reached. We tend to only see what we want to see.

    Learning to apply them as objectively as possible is key.
    "Risk comes from not knowing what you are doing" --Warren Buffett--

  3. #3
    Hi guys, with regards to bollinger bands , does the bollinger bounce work best when the bands are close together or far apart ?

  4. #4
    Market Maker Kenny's Avatar
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    The existence of a trend is a more important factor to focus on rather than the width of the Bollinger bands, however they do tend to close together as price consolidates and when a break can go either way. Because the bounce system works best when markets are trending the bolly bands are likely to be much wider.
    "Risk comes from not knowing what you are doing" --Warren Buffett--

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