Select indicator signals: examples and recommendations

Signal indicators or "arrows" such as those called by professionals, appear as the simplest algorithms designed to recognize specific entry points where you can buy or sell an asset at the desired time.

In fact, groups of indicators like this cannot be judged in a pluralistic way, because they contain reliable expert advisors and indicators that are created too hastily in which the creators call it the "cup of life" in the hope that new beginners and speculators can pay money to buy it.

Plus, often the simple appearance of this indicator hides the complicated and very interesting formulation, so the accusations from traders who don't use indicator analysis come to beginners and even some programmers who don't want to think this can be peeled one by one.

Signal indicator to look for trends

Do not want to discuss the theory too much, then we will look at some algorithms and start with, of course, with trend indicators. You should immediately note that almost all of these indicators are created as standard parts that are already equipped with any terminal, and are only intended to facilitate the process of finding a trend reversal, where the creators try to combine several formulas in an indicator so they can improve the quality of the signals it produces. A classic example of this approach is the Fiji Trend indicator.

Unlike its friends, this Fiji Trend indicator is not displayed on the price chart, but on a separate screen, and is therefore often referred to as an oscillator. Like the signal indicators in general, this indicator will notify the trader when a trend changes using arrows (green, the trend changes to bullish, red then the trend changes to bearish).

The latest trend is also illustrated with special colors - a sequence rather than arrows that are tilted with colors such as "water" which indicates that bearish strength is stronger than bullish strength, and a row rather than yellow with arrows pointing down gives an indication of more sellers than buyers.

This expert advisor uses calculations with a combination of indicators such as ATR and moving averages, so a number of blocks than this variable can be overhauled in the setting screen rather than the indicator (one for setting the moving average and the second for the ATR period). In addition, the user can activate voice notification when the signal appears using the SoundAlert variable, which will be irreplaceable when traders trade within the period below H1.
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But the "arrows" are not the only signal indicators for trends, the algorithms presented in histogram form are no less popular today. The Coron Forex indicator can be said as an example, where both provide signals similar to traffic lights.

As you can see, this indicator shows three statuses rather than exchanges, where each of these statuses is specified in a specific color, but you must not immediately swallow it raw on this approach, because the signals generated by Coron Forex will like different from the usual indicator with the sequence "down, flat, high" and can be translated as follows:

  • The red bar - the exchange has gathered strength to turn downwards. Sell when the yellow squares have been replaced with a red box;
  • Green bar = exchange has gathered strength to turn upwards. Buy after the yellow boxes are replaced with green boxes;
  • The yellow bar tells the strength of the current movement.

Unlike the Fiji Trend, it does not need change, but you should note that it works best in large periods of time (H1 and up), but in smaller periods, on the contrary, it will give a lot of false signals. On the one hand, the trend indicator must process prices over a large period of time, otherwise it will lose its influence and cannot provide a good signal to open a position.

What signal indicator should you choose to open an order

After you determine the direction of price movements, the classic approach is that you have to look for other signals to buy or sell, and if we continue this assessment, we recommend the A Hanafy5 indicator to be used as an example.

Unfortunately, the creator of this indicator turns off the function to set the settings in this indicator, but first, A Hanafy5 works very well with standard configurations, and the second is, you can always use MetaEditor to modify this, because the indicator code is open and can be obtained for free.

It is not difficult to guess that you have to open a buy order when a green arrow appears, and make a sell order when the red arrow that leads down appears. These signals are based on values ​​rather than RSI (14) and Parabolic SAR, which means that A Hanafy5 actually determines the direction of the trend and its entry point, but it is better to combine the results obtained from this indicator with the results of other indicators.

By the way, many of the signal indicators are similar to each other and can look for optimal entry points with positions at the same level - for example, an indicator called showNticks forms these signals very close to the signals produced by A Hanafy5 , although they have dramatic differences in the program code they have (showNticks are not based on RSI values ​​but at typical prices).

This is because all indicators and formulas are always based on price, so no matter how these indicators process the information they get, the results will always be the same. Of course, the difference will be seen from time to time, but more often the difference is caused by the use of special filters, where the use will make you able to balance the number of patterns with reliability.

Some things that must be considered when choosing a signal indicator

In today's selection, we specifically examine indicators that are not redrawing, but we cannot forget that none of these indicators has such an important quality - but on the contrary, most of the "arrows" replace signals they are in the stages of several candles after they appear, and describe the new signal. On the one hand, because of that, some experienced traders have a negative view of these indicators.

To avoid rather than wasting time and money, it is always recommended to install the indicator on the minute chart first, or use Simple Forex Tester v2.0, where this program can allow you to see simulations of price movements. This approach will allow you to understand that the indicator you are using will redraw from the first minute.

The second negative thing that many traders face using indicators like this is the lack of information on the calculation formulas used by these indicators. Even in the example from today, the adjustment section is closed, but the algorithm can be seen in the program code.

If only .ex4 and .ex5 (without .mq4 and .mq5) can be seen, it is not recommended to use the indicator, because it is very unreasonable, because it will not provide more knowledge, and may even stop suddenly when renewal rather than trading terminal.

In summary, we must note that signal indicators are very useful for traders, which of course with the right reasons cannot monitor the situation on the exchange, because the use of voice notification can make the trader do other work while trading.

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