Hearing the terms “non repaint indicator” and “repainting indicator” may have you wondering what the difference is. At some point in your trading career, you may witness laser accurate trading signals from an indicator and thought you’ve found the Holy Grail. You are not alone…present company included!
Lots of Stuff
Out of curiosity, I did a little research on articles written on this subject. Some were pretty good, some not, and some were downright confusing. There were even a few which could have passed for doctoral thesis essays; very involved and somewhat difficult to understand. What we do here is try to explain FOREX concepts using an easy-to-understand format, in a fun, fact filled kind of way.
What, Me Worry?
“I’ll never have to worry about actually thinking when I trade…I’ll just reverse my position whenever that arrow/line/dot/alert/alarm makes its appearance on the chart! I’ll turn this $250 account into a million bucks within a month and tell my boss to pound sand!”
Easy Math?
Unfortunately, it’s not that easy. In fact, the math makes it nearly impossible to have those kinds of laser accurate signals. Just about every signal out there is lagging, or based on past data. Even those indicators, which purport to foretell the future or attempt to extrapolate future values or patterns based on groups of past data (like the Zigzag and Fractal indicators), cannot be entirely accurate because we are not wizards, fortune-tellers, or have some mystical insight to a 5 trillion dollar market.
Pretty Pictures
Patterns aren’t something we subscribe to either because they generally aren’t visible until time has moved past them. If you happen to open a trade at the moment price reverses, consider yourself fortunate…since luck has no place in trading, in fact; it’s generally viewed as a coping mechanism when things aren’t going well. And, that’s not good either.
Very suspicious
When you see an indicator call tops and bottoms with incredible accuracy, be suspicious….very suspicious. As one who has spent years investigating indicators, the approach taken is one of skepticism, especially if signals correctly “call” every trade. Conduct your own investigative research. Here is how you can find out for yourself.
Ways to Test – Method One
There are a couple of easy ways to determine if an indicator is repainting. The easiest way I’ve found is to load any currency pair, attach your indicator on the chart, and change the time frame to the 1-minute time frame. Glue your eyes to the screen and watch the tick by tick movement of price in relation to the indicator very carefully. You can also record the active portion of your screen with a “screen capture” utility and move through the recording to determine if the indicator is in fact repainting.
Ways to Test – Method 2
Another method is to use the MT4 trading platform’s strategy tester on “visual mode”, slow down the testing speed and watch the indicator very carefully to see if signals change after candles close. The beauty of using this method is that you can keep running the test until you are satisfied that no repainting exists.
Two Things to Watch For
One of two things will happen. A signal will print on a candle, and then the signal will move a few candles back as it gathers additional data. I’ve included a series of chart images exhibiting shady signals below. The indicator below is known as, “Solar Winds” or some variation of “Solar _____”.
Below is another repainting indicator called “Renko Super Signals”. There are a few Renko variations for download on the web; some repainting, some not; so exercise caution before taking signals using this indicator for trade entries.
Below is a screenshot of the Renko Super Signal. Notice it’s on the 1-Minute time frame. If you’re patient, you’ll easily see that the signal moves each time a new swing high/low is made.
Also included is a screenshot of the strategy tester. Having the ability to slide the “speed” of the chart provides an easy way to spot the offending indicator.
The other indication that the indicator may be repainting can be seen when the signal prints at a previously closed candle, which has since been followed by additional candles. Because we can’t go back in time to open a trade…as much as we’d like to, this just isn’t helpful.
What’s Going on in the Code
Within the code, the indicator will amalgamate/collate data and then backwards plot the highest or lowest value that corresponds to the specific candle, thereby giving you amazing signals. Unfortunately, by the time it prints on the screen, time has elapsed, taking profits with it. Sure, you could get into the trade…but this becomes a strong case for FOMO (Fear Of Missing Out) on what might be a profitable trade…or not. Certainly a bad habit to get into.
What Can You do About it
Unless you’re an accomplished coder, not much. You could certainly contract someone to “code out” the repainting aspect of the indicator, but with so many other wonderful indicators out there, the easiest, fastest and smartest thing to do is just find another one. I’ve read many posts in multiple forums discussing how to address those handful of repainting indicators, but at the end of the day, your efforts would be much better spent researching the thousands of available indicators which provide more authentic signals.
Avoid the Temptation
While we only named two repainting indicators, beware, there are more. If in doubt, run a quick test to see if any changes in the signals are present and immediately delete them from your MT4 indicator (Navigator) listing.
You’re Better Than That
Be smart. Be diligent. Coders will try to create the best indicators; however, many of them are not traders. That’s fine…they’re just pushing the math. Be especially cautious if you’re considering purchasing an indicator/system which makes unrealistic claims of perfect (or nearly perfect) win/loss rates. The amount of “garbage” out there on slick looking sites is abundant. The bottom line is caution and common sense. If it looks too good to be true, then it probably is.
More to Come
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Learn More Here
Want to learn more about where and how to find/test/use better indicators? Check out the Stonehill Forex Advanced Course HERE, for more information.
Our only goal is to make you a better trader.
BTW – Any information communicated by Stonehill Forex Limited is solely for educational purposes. The information contained within the courses and on the website neither constitutes investment advice nor a general recommendation on investments. It is not intended to be and should not be interpreted as investment advice or a general recommendation on investment. Any person who places trades, orders or makes other types of trades and investments etc. is responsible for their own investment decisions and does so at their own risk. It is recommended that any person taking investment decisions consults with an independent financial advisor. Stonehill Forex Limited training courses and blogs are for educational purposes only, not a financial advisory service, and does not give financial advice or make general recommendations on investment.