You will find out a definite answer to this
question that haunts every trader. You will see the results of a comprehensive
study of 127 indicators. And THE WINNER IS…? You would most likely never have
guessed it. It is an indicator that every trader knows and many
traders use. The question is whether they use it properly and profitably. Should
you use it? Read on...
The study of
127 indicators
In this book of 800!!! pages the author and his team present
the results of testing the performance of 127 indicators for a period including most of the
previous century for Dow Jones Industrial Average. (Note: the study doesn’t differentiate
between indicators and oscillators.)
Unfortunately a similar study doesn’t exist for the FX
market. But indicators are indicators because technical analysis is technical
analysis in any market so let’s see whether we can learn from this study something
for our FX trading
They compared results of the performance of the
Buy&Hold strategy with a strategy using a particular indicator. There were
some other rules which are irrelevant for this discussion.
The tested indicators included also the indicators
that are widely used in FX trading like:
various types
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