Sunday, September 24, 2017

Forex Indicators versus Forex Candlestick

January 12, 2012 by  
Filed under Forex FAQ & Latest Post

In today forex faq, we have an interesting question from one of our fellow traders.

Below is the question:

Is any particular technical indicator more important than the other? I have observed that if all other indicators are encouraging buying and for example forex candlestick is saying sell-if I take a buy decision-SOMETIMES market may still be going against me. Why is this so?

Like what I have written in my other posts, there is no best indicators in the market. Every indicator has its own personality and therefore is suitable for different strategy. What works in one strategy might not work in another.

Therefore this is no technical indicator that is more important than other.

As for your example saying that all indicators are showing BUY signal while your forex candlestick is saying SELL and indeed sometime you get stopped out for the mix signal.

This is something that you must accept in trading. Even when all the indicators are showing BUY and the candlestick is showing BUY, you might still be stopped out sometime. What we are trying to do as a trader is to look for ways to increase of odds of winning but there is no way you can increase your winning percentage to 100.

What is more important is for you to do a strategy check by looking through your chart for the past 6 months and then see how many times you win or lost when all the indicators are pointing in the same direction.

If the result is profitable for you, then you should stick to it even if there are times when you lost. However what you can do is to check the number of times you win vs loss when the forex candlestick is against you. If there are more losses than wins, then you should take the candlestick patterns into consideration as part of your trading plan.

As a whole, there is no one factor that is more important than the other. In order to have a winning trading strategy, you need to be able to incorporate various indicators and tactics into your plan.

I strongly suggest you to take your strategy and go through the past 6 months chart to see if it really works. If it indeed make you money month after month, why worry about those losses.

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