Predictive Indicators: Opening the Door to the Future
The DeM indicator is composed of a single fluctuating curve. Traders will occasionally add an exponential moving average, as above in red, to enhance the value of the trading signals. The DeMarker indicator tends to pick major bottoms better than tops. A shorter period setting will create a more sensitive indicator, but will also increase choppiness and the potential for increased false signals. The next article in this series on the DeMarker indicator will discuss how this oscillator is used in forex trading and how to read the various graphical signals that are generated.
Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you. Brought to you by: Was this article helpful? Currently, there are even some communities of traders who are good in programming and create products aimed at general consumers.
Among many such projects, there are also nonprofit resources where you can get information and download the indicators you liked. Almost every trader, who studies predictive indicators, is familiar with this name, which almost completely reflects the way of its operation. DPP generates certain so-called anchor points, which the trader can consider in making trading decisions. To calculate these points levels , the data is used on the dynamics of the price over the previous trading day.
The result of all calculations is the levels: All lines are formed directly on the chart of the traded instrument. Yellow levels are located above the expected magnetic price, and the red ones are below. Thus, DPP is quite an interesting indicator that not only helps traders determine some specific points, which the price is more likely to reach, but also sets the levels at which the price may face resistance or get stuck.
DPP can be used by both the traders along the trend and traders specializing in trading within the range. By analyzing historical data, FFX searches for matches in the trajectories of the price movement. In fact, all the work is based on an approximation of the dynamics of prices for a certain period.
The increment is specified in the indicator settings. The result of the calculations is simulation of the chart signs. This is a channel, which is based on the average of similar historical data. There are no restrictions on the timeframes for the indicator.
The most similar match is copied as a set of yellow bars, as if continuing the current chart. Continuing our informal top list, we will also review the well-known predictive indicator named Xprofuter.
This tool works well mainly in the framework of the trend. In the consolidation phase, the predictive value of the indicator tends to zero. Xprofuter builds a line on the chart, continuing it. This is a very respectable figure for trading.
The downside of this tool, perhaps, is the fact that it is able to provide more or less stable results only on small timeframes. Although, it is worth noting that most of the predictive indicators work most efficiently at a relatively small time periods. You should not underestimate the high degree of sensitivity of this indicator. TSF in the chart is displayed as a line, which is superimposed on the trajectory of the price change.
It is quite easy to use this tool. If the quotations of the currency pair go below the TSF, this fact indicates a high probability of a downward trend, and vice versa. At the end of this article we would like to give you some recommendations.