Forex: When to use what indicators?

@ahgong (10064)
January 19, 2010 12:54am CST
I was reading up on indicators and how they work when I met up with a friend recently and we lightly touched on the topic of trading. In a passing mentioned, he said that different indicators work in different markets. Some indicators work best in a trending market. But when the market ranges, these indicators become unstable. As such, a different indicators need to be applied to the ranging markets. So I went home and pondered on this for a long time. Anyone here can help? How does one recognize that an indicator is good for trending and not ranging markets? Even if I want to do a back test, what should I be looking out for when testing the different indicators to use for my system? Any advise from the gurus?
2 people like this
3 responses
@jengkol (116)
• Indonesia
20 Jan 10
i'm still a newbie in forex world, I think you have answer your own Question my friend. on tranding market just use the indicator that work best on that situation, and on ranging market it would be wise to use other indi cator that work best at ranging market such as all of oscilator indi. so one thing importance for you is to determine wether the market is on ranging or trending situation :)
@kun2349 (23475)
• Singapore
20 Jan 10
U are still on forex after a year or so?? U are really patient huh!! hehe ^_^ I do agree with what your fren says though.. There are different indicators for different markets as they are offering different things.. High risk- high returns, low risk- high returns and many other etc.. Thus the same indicator cant be used for all.. IF not, everybody would be opting for the highest returns, and yet lowest risk right?? hehe ^_^ But as for how it's gonna work, i really have no idea.. haha =D SORRY!!
• Singapore
19 Jan 10
Hi ahgong, You must read up on the indicators concerned. The good ones are usually developed for certain specific situations (though some claim to be absolutely versatile). So... read up the history of the indicators and study the formula if the math doesn't bother you hehe.