This article has been translated from English to Gen Z Slang.
Ayo, lots of forex peeps be using these things called technical indicators in their trusty technical analysis kit.
So, we’ve already chatted about the two types of technical indicators based on when they spill the tea with their signals.
Quick TL;DR of what we covered in the last sesh:
There are two types of indicators: leading and lagging.
- A leading indicator or an oscillator drops hints before the new trend or plot twist happens.
- A lagging indicator or trend-following indicator gives you the 411 after the trend has already begun strutting its stuff.
Leading Indicators
Leading indicators are basically your homies oscillators.
They’re called leading ‘cause they spill the beans before the potential trend plot twist actually hits you.
The dope part about leading indicators is they can get you in on a potential plot twist before everyone else.
The annoying part? Oscillators sometimes be capping with all those false signals.
Leading indicators ain’t it by themselves. You gotta mix it up with other stuff like Japanese candlestick pattern vibes, classic chart patterns, and those solid support and resistance moves.
If you can vibe with the type of market you’re playing in, you can spot which indicators got the juice and which ones are just meh and should be left on read.Some of the cool kids in leading indicators are the Stochastic, the Relative Strength Index (RSI), Williams %R, and the Momentum indicator.
Lagging Indicators
Lagging indicators, aka trend-following or trend-confirming indicators.
These bad boys drop the trading deets after the event has already flexed on the chart.
The bummer with lagging indicators? They pull up late to the party. This means you might miss out on a whole chunk of the price glow-up.
Go-to lagging indicators are Moving Averages (Simple, Exponential, Weighted), Parabolic SAR, and the Moving Average Convergence Divergence (MACD).
So, how do you figure out when to roll with oscillators or trend-following indicators, or maybe both?
That’s the million-dollar riddle, fam! We all know they ain't always vibing in sync.But don’t worry, we’ll hit you up with that million-dollar answer super soon…
Oh hold up! We meant the million-dollar answer, not the cash!
For now, just know this: once you get the hang of the market type you’re diving into, you’ll know which indicators are spilling facts and which ones are just noise at that moment.This isn’t a walk in the park.
But it’s a skill that’ll level up as you gain more XP.
And guess what…
You’re not grinding solo!
In the upcoming parts, we’ll school you on how to sus out the forex market scene you’re in so you can flex these indicators like a pro!
