Buy/Sell indicators
💎 This is how Buy/Sell indicators should be used based on my own experience 💎
Purpose of indicators
Indicators are built to indicate something, they do not predict or confirm anything itself. What I mean is that indicators are not built to be followed blindly.
Change in price structure
Often, indicators indicate a change in the current price structure which may lead to a new structure in the near future. That is immensely valuable information for Traders, we get heads up about potential future price structure, bullish/bearish.
So to clarify things,
A Buy/Sell signal on the chart does not mean that the price will make a significant move in that direction directly. It's not like that we gonna get a 100 pips move within the next 10 candles... We just get the information that price structure can change in the near future and we have to start to look for confirmation/confluence that supports that idea.
Have a look at the example below:
German 30 - 1 min chart
1) Using Day Open as a level (price will most likely respect or do something around day open (consistent pattern))
2) Using simple resistance level derived from the 1-hour chart.
3) Using Trend Algo to confirm that price structure may change around the levels. Which is a good confirmation that supports the idea that the levels are respected and the price will most likely react in some way.
Read more on how to use Buy/Sell Indicators
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