Tuesday, June 14, 2011

Purpose of technical indicators

Q: What is the main purpose of using the indicators? Are they just for visual display? If I press the Expert Advisor button, will the indicators on display be put into the subsequent calculation process and affect the result?

A: In contrast to forecasting algorithms, which pretend using historical data about a time series to foresee its future behavior, technical indicators typically depict some aggregated characteristics of a time series in the past. Even despite these patterns might be looking attractive in terms of predicting the future trends, they typically rely on certain time lags in revealing the tendency. We generally believe that indicators are useless in market prediction. They are added merely to satisfy the people familiar with other platforms. We do not use indicators in market forecasting and strategy calculations. Only predictors take part in a strategy optimization.