The Quest for the Best Forex Indicator

Traders use many methods and indicators for trading. In their efforts to find the best forex indicator the goal proves to be elusive, but their efforts do pay.

What is the Best Forex Indicator

Many traders have embarked on the quest of finding the holly grail method for trading the markets. Among them is the goal of finding the best forex indicator, for predicting currency movements. It all looks possible on the forex charts, at least in hindsight but when one deals with live forex rates and fast trading things are really put to the test. Markets are tough to beat, some believe that all indicators are bound to fail big time, at some unexpected time. And that the predictability of the financial markets is severely limited. Maybe that is the case indeed, after all, if one has found the holly grail and their trading is limited and well hidden, we will never know. Some technicians believe that the information is somehow encoded on the market charts, in metrics such as momentum and daily trading range. Others believe that the secret lies in intermarket analysis, and others believe that all indicators are good once in a while, but no single indicator can work in continuous mode. Indicators tend to be all over the place, and never agree with each other at any randomly chosen time.

Figuring out the Best Forex Indicator from Price Action

The best forex indicator may be some indicator which best predicts a particular time frame, where false signals are somehow revealed easily to the trader. It is unlikely that one indicator, no matter how good, can work on various time frames. The global forex converter mechanism hides many dangers to investors and traders. And it does so because history does not exactly repeat itself, rather something new, never seen before, is bound to happen every now and then in the markets. This is the reason why forex robots end up failing after a while, because the programmer cannot dynamically model the markets in their computer code. Traders who have been successful, so successful that their trading cannot be attributed to luck and the use of simple indicator, are likely to actually have used simple indicators. It all boils down to how they used these indicator and how they were able to filter out false signals. It is unlikely that the holy grail is some kind of mathematical formula or algorithm, if it is then it would have to be enormously complicated that only the quantum computers of the future would be able to handle. Then again, it might be a simpler formula used together with the trader’s own judgement. The most logical explanation is that super successful traders did a lot of research beforehand. Research that was specific to the time period of trading, and the markets they traded so successfully.