FX Trade Operation Room｜ Episode 6: Technical Indicators Are Not All-Powerful [FX攻略.com Editorial Team]

From the standpoint of publishing the only monthly FX information magazine in this country, the purpose of this project is to extract mistakes and common misconceptions that many traders tend to make and share them with everyone. This time, we would like to think about “misinterpretations of technical indicators.”

【FX Trade Command Room [FX Strategy.com Editorial Department]】
・第1回 League and Tournament
・第2回 Before Starting Scalping
・第3回 FX Skill-Up
・第4回 How to Effectively Use Various Order Types
・第5回 About Seeking the Holy Grail of FX
・第6回 Technical Indicators Are Not All-Powerful

Table of Contents

1. The Movement Processing as Technical Indicators
2. Technical Indicators Are Not Magic
3. Depending on the Parameters, They Can Take on Completely Different Forms
4. Understanding the Formulas Behind Technical Indicators
5. Delving Deeper into Technical Indicators
5-1. Almost all technical indicators are derived from processing the candlestick/price
5-2. There is no universal edge in the signals of technical indicators
6. Three Principles of Mindset for Facing Technical Indicators

Movement Processing as Technical Indicators

From surveys and seminars, readers show great interest in technical analysis. This is likely because it makes it easy to imagine trading rules and, in turn, strategies that seem likely to yield profits.

At the core of technical analysis is chart analysis using technical indicators (indicators) such as moving averages and RSI. You may have heard of timing of trend formation through crossovers between moving averages, like golden crosses and dead crosses.

Now, these technical indicators essentially recalculate previous price movements and present them in a simplified way. In other words, they are a processed version of the chart, and they do not exist independently or stand on a chart without price movement.