Best Proven Forex Indicators – Best forex indicators combination for trading in 2021-2022 Thursday November 18th, 2021 – Posted in: Forex trading
We will find the best forex indicators that work well together right now.
A Forex Indicator is a computer program written in the programming language of a trading platform for manual trading. Also, a combination of forex indicators can be used to create an automated trading system.
The best forex indicator
Many forex traders believe that a forex indicator is a ready-made trading system that issues buy sell signals, following which a trader will earn on the forex market with a high degree of accuracy. Unfortunately, this is far from the case. A trading system is a set of rules, consisting of rules for entering a position, rules for setting stop loss and secret profit, rules for exiting a position, money management rules, etc. For this reason, even if you find proven best forex indicators and will diligently open orders for buy-sell signals, then eventually you will see that your deposit begins to decrease. Therefore, let’s take a look at what a forex indicator is and how to choose the right best forex indicators combination so that these forex indicators will work well together.
Forex indicators and how to use them
So, as I said earlier, a forex indicator is a computer program that is written for a specific trading platform. The most popular platform for writing and using forex indicators is
MetaTrader 4 – The platform contains a huge number of built-in standard indicators and also allows you to write your custom MT4 Indicator in the built-in MQL4 programming language.
MetaTrader 5 – The platform also contains a huge number of built-in standard indicators and also allows you to write your custom MT5 Indicator in the built-in MQL5 programming language.
Other trading platforms that allow developing forex indicators: cTrader, jForex, Tradeview….
You can either program the forex indicator yourself if you have certain programming skills or order the indicator from experienced programmers. You can also buy ready-made Proven best forex indicators on websites or find a free forex indicator and download it to your computer.
Important! The Forex indicator should only have the function that the developer has put into it. What I mean. If it is the MACD Divergence indicator, the indicator must correctly identify the divergence areas between the price and the MACD indicator. Even if arrows are drawn on the indicator, this does not mean that you need to open and close orders using these arrows. This means that there was a discrepancy in these areas. If you are testing such an indicator, you need to visually understand where the divergence occurred between the price and the MACD indicator and compare with those areas that your MACD Divergence indicator showed and not see whether there was a price movement after the divergence or not.
If you have a support/resistance forex indicator, then you need to understand that the indicator shows you only support and resistance lines and does not urge you to trade from them.
After the forex indicator is on your computer, you need to install the appropriate platform for it to work.
If your indicator has the extension
.mq4 – This is an open-source indicator for the MT4 platform. This means that you can study the MQL4 code and, if necessary, make changes to the indicator code.
.ex4 – This is an indicator for the MT4 platform without open source, but only an executable file. This means that you will not be able to make changes to the indicator code.
.mq5 – This is an open-source indicator for the MT5 platform. This means that you can study the MQL5 code and, if necessary, make changes to the indicator code.
.ex5 This is an indicator for the MT5 platform without open source, but only an executable file. This means that you will not be able to make changes to the indicator code.
After installing the MT4 or MT5 terminal, you need to open the File -> Open Data folder
Pic. 1 -How to install and use forex indicator
And place the indicator in the MQL4 / Indicators/folder for the MT4 terminal and MQL5 / Indicators / for the MT5 terminal.
After installation, the indicator will appear in the MetaTrader navigator window and can be added to the chart.
Forex indicator categories
Forex indicators can be divided into several categories
Momentum forex indicators: Stochastic, RSI, CCI, Williams%, MACD.
Trend forex indicators: Moving averages, ADX, MACD, Parabolic SAR, Bollinger Bands.
Volatility forex indicators: Bollinger Bands, Envelopes, Keltner Channel …
Best forex indicators combination
So we understood what a forex indicator is and how to use it. Now let’s move on to how to choose indicators that will work well together and make up the best forex indicators combination for your trading system.
Using ADX, RSI Divergence forex indicators together can show a change in market direction and serve as an excellent combination of indicators to enter a position. Clarification of entry currents, as well as determining the level of stop loss and profit, may well serve the support resistance Forex indicator.
Pic. 2 – Forex Indicators combination: ADX, BJF RSI Divergence, BJF Support / Resistance
When approaching a support or resistance line, ADX can show the strength of the range with sufficient accuracy, and the divergence indicator such as the RSI divergence indicator will help to confirm the signal. It is advisable to place the entry point, stop loss, and so on the profit at the support resistance levels. For a more accurate selection of the divergence indicator for a specific currency and timeframe, the Multi-Divergence Indicator can serve well.
Pic. 3 – Forex Multi-divergence Indicator
This example shows how to choose the Best forex indicators combination for your trading system.
To test the trading system, I would still recommend programming a forex robot using a selected combination of the best forex indicators. This will help you not only optimize the indicator parameters, but also make a test on historical data to understand all the disadvantages and advantages of your trading system, quickly find methods for improving it, and choose the best timeframes and trading instruments.
How to test a forex indicator on historical data
This method will help you evaluate the work of any forex indicator in a visual mode or a combination of an indicator not only on the current market but also on historical data, although more accurate testing is possible only if, based on the indicator, or the best forex indicators combination that you intend to use, create a forex robot and perform optimization of parameters and testing on historical data. Therefore, the testing method described here serves mainly for the preliminary assessment of the selected combination of forex indicators.
Pic. 4 – testing a combination of indicators in the MT4 tester
Run any simple forex robot in the MT4 or MT5 strategy tester in Visual mode on the symbol and timeframe on which you would like to evaluate the work of the forex indicator or forex indicators combination. Forex robot will form and open a chart. Click on the pause sign next to the “Visual mode” checkbox and reduce the rendering speed with the slider next to the “Visual mode” checkbox. Attach your forex indicator or combination of forex indicators to the chart and press start. Adjust the rendering speed with the slider.
Who needs a forex indicator?
Forex indicator is the basis of any trading system, both a beginner and an experienced forex trader.
How much do I need to start trading with a forex indicator?
If your broker allows you to trade with a minimum lot of 0.01 then you can start with $ 200. If you are not sure, then it is possible to test your trading system on a demo account without a real deposit.
Do I need forex trading experience to start using a forex robot?
Yes, you need basic knowledge of the trading platform and trading operations. For inexperienced traders, we would recommend starting trading with forex robots
How much can I make using a forex expert adviser?
It depends on many factors such as the number of instruments traded, trading strategy, etc. Shorter-term strategies such as scalping or arbitrage are more profitable and can bring 40-45% per month, but at the same time brokerage companies are trying in every possible way to counteract traders who trade arbitrage or scalping. Longer-term strategies are less profitable.
Do forex indicators work?
Professional forex indicators can help a trader create a reliable strategy that will help him profit from forex trading.
What is the best forex indicator?
If the forex indicator performs the role that the developer has laid down in it, then this indicator can be considered the best for this task.
Author: Boris Fesenko Last update: 17 November 2021
Boris Fesenko – CEO BJF Trading Group Inc., ON, Canada https://bjftradinggroup.com is a specialist in the development of automatic systems for trading in the forex market and cryptocurrencies. Since 2000, the BJF Trading Group team of traders, mathematicians, and programmers has created over 5,000 robots and indicators. Boris has a master’s degree in electrical engineering and a master’s degree in programming.