I went online to browse a few different trading forums to find new topics to cover in these articles, and I came across something interesting…
I saw one comment about how moving averages are too delayed to work in the real world.
The post went on and on about how these things look good on paper, but how they don’t offer us anything in real-time trading.
This got me thinking about lagging and leading indicators, and the effectiveness of them in a real-time environment.
So I figured I’d outline some of the best swing trading indicators out there…
The Best Swing Trading Indicators That Work in the Real World
By now, you’re probably all wondering what swing trading indicators work best in the real world…
I always say that the best swing trading indicators can serve two different roles.
The first role is to identify specific market conditions or to further my analysis. I call these general indicators because they’re not used to time entries or exits. They’re used more often than not for general analysis.
An example of this is the moving average indicator.
I find the simple and exponential moving averages to be valuable indicators…
And not for telling me when to enter a position, but instead to guide me in the right market direction or trend.
I agree with the fact that it’s not the best swing trading indicator out there because it lags and doesn’t make real-time trading efficient or precise…
However, for finding the direction of the trend, moving averages are useful and beneficial most of the time.
The other type of indicator I find useful is the “specific” or “setup” indicator.
This indicator tells me where to enter and exit my trades, and where to put my profit target and stop-loss orders.
The book “Market Wizards” by Jack D. Schwager discusses indicators and compares them to lenses.
Jack explains how every lens will color the view, but the clearest view comes from not having a lens.
Those few words are important to understand because the clearest indication of price action is price action itself.
Think about it for a minute…
Traders and investors use indicators based on price action to determine what’s going to happen next, instead of looking at the actual price without any filter.
If you notice, most of my entries and exits are based on price levels or actual price bars.
I use price data to determine most of my entries and exits.
Remember, there’s no better technical indicator than price itself.
So the next time you’re looking for the major indicator with no lag or delay that gives you the best snapshot of the market, just look at the actual price itself!
I plan to expand even more on this topic in the future because there’s a great difference between the best swing trading indicators that work in the real world, and the ones that only work on paper.
For more on this topic, please go to: Learn to Swing Trade Options With This Beginner-Friendly Strategy and The Best Short-Term Trading Strategy for Beginners.
I hope this helps!
All the best,
Senior Strategist, WealthPress