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What is the update of indicators on Forex
In the academic literature from the foreign exchange market it is very common to see the mention of the so-called "redrawing indicators. Newcomers have the question arises – how really dangerous this phenomenon and should just give up on these algorithms, which is replete with the entire Internet.
Given this fact, today I decided to talk in detail about all the features and disadvantages of the indicator analysis.
First of all, take a look at what the update indicators at Forex. This term refers to the situation when historical values of the indicator change over time, resulting in the previously generated signals are incorrect and unprofitable.
In other words, the update leads to the fact that the marking indicator is perfect on deep history and real-time signals appear and a few candles disappear as if they were never there. To make it clear what is at stake, consider a specific example.
As the indicator redraws
As you can see, the first indicator gave a signal to buy (in the histogram appeared blue bars), but after a few candles from this pattern has not disappeared – on the site of the former bars there were red candles indicate a continued bearish trend.
Here is another example, which demonstrates that the update of indicators on Forex. The following graph shows the markup pointer algorithm called Super Signals Channel in the recent past and in current time.
A signal to sell and upgrade
Obviously, in this case it is impossible to build a trading strategy on the basis of the generated arrows, as they can appear and disappear.
Typically, a repaint is manifested in two main reasons, the first of which has to do with errors in calculations and attempts to apply complex mathematical and statistical functions.
Here I cannot blame the authors of the indicators, as most often this phenomenon is observed in the initial versions of the promising techniques, which will eventually become clearer and begin to benefit. Still, even in the scientific community the first experiments often fail.
And the second reason is much more prosaic redraw, it is associated with the desire of developers of indicators to gain more money from the sale of their algorithms. Novice traders, dreaming of a "Holy Grail", most often not even aware of the fact that the signals of the strategy can be drastically different in history and in real time, therefore, seeing a perfect layout in the past, newcomers are much more willing to pay money for "dummy".
Such an attitude to customers can be described in various ways (fraud, false advertising, etc.), but to protect themselves from such manipulation is possible solely because the market indicators are not regulated.
I think I sufficiently answered the question "what is the updates of indicators on Forex", so now I would like to give a few tips on how to avoid such phenomenon, buying or downloading a new algorithm.
Protection select indicator repaint
If you are planning to buy an indicator, you should ask the author a free demo version, whose functionality will allow you to check the quality of the signals. In some cases, the developers denied this request, reasoning that his desire to protect the algorithm against tampering, which, of course, is cunning, since today has all the means for protection of the source code.
It should be noted that some demo versions of indicators do not work in the tester (typically, this is due to the "curve" code, i.e. direct intent is not here), but perfectly generate signals in real time on the chart, so the test will be sufficient to include the one-minute timeframe and some time to observe the process of formation markings.
In the second case, that is, if an indicator slips into a third-party resource on the Internet, a trader can without any restrictions to using the tester built into MetaTrader 4. To do this, simply open the appropriate panel and select from the list the corresponding algorithm.
Custom indicator in the strategy tester
As in the case of advisers, before the test, we will need to identify key variables, see "indicator properties" and download as many quality quotes.
After starting the test will open an additional graph in which the program starts to simulate the movement of the price and the indicator will be calculated exactly the same as on a normal desktop window.
Identifying redraw during trading
Answering the question about what the update indicators on Forex, I have focused on work non-standard algorithms, ignoring similar criticism in relation to classical instruments.
The fact is that very often you can hear phrases like "repaint moving averages," "RSI down" etc. Here we are talking about changing the values of the indicator on the last candle.
Update extreme candle on the chart
To call this phenomenon re-drawing is impossible, as the historic significance of the markings remain unchanged, and to eliminate all possible negative consequences, it is sufficient to wait for the close of the last candle, or you can configure the indicator so that it is calculated on the opening prices of.
To sum up today's review, it should be noted that many indicators (both native and classic) are working correctly, updates are quite rare, but it does not mean that all of them benefit. In the following article I have compiled a list of the algorithms, which, in my opinion, when developing a trading strategy should pay attention in the first place.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 259
| Rating: 0.0/0 |
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