Stock Forecast Methods

Stock Market Trading and Investing

The Best Technical Indicators of 2010

Is it possible to find the best technical indicators that are the best for all cases? The best way to find the answer is to collect and analyze data and make a comparative analysis for many years. In fact, statistics shows that depending on different time-frame, market conditions, industry specifics, type of stock or ETF, and other factors, some indicators might be best but other worst, and vice versa. The major conclusion – it is better to select the best indicators for a particular case.

In general, the question can be answered if an average is calculated (although it might be not so helpful). Specifically, concerning average forecasting success based on the statistics during 2010, the five of top winning indicators are:

  1. Relative Strength Index
  2. Money Flow Index
  3. Twiggs Money Flow
  4. On Balance Volume
  5. Directional Movement System

Another problem is that there are not only many technical indicators but also many different interpretations of their signals. Some traders use particular favorite indicators and insist that their interpretations are right. A computer program could decide using back-testing which indicator should be trusted more and another less for particular market conditions and a specific stock. It could compose the forecast with weights accordingly to predictive ability of each technical indicator. The example of such program is Investment Analyzer (10-day forecast using Neural Network).

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March 30, 2011 Posted by | Stock Market Forecast, Stock Market Software | , , , , , , , , , , | Leave a comment