Which Is The Best Indicator For Swing Trading?
Which is the best indicator for swing trading?
Among the almost unlimited bells and whistles in the trading platforms, there are a few swing trading indicators that are better than others. And, in our opinion, the oldest and most traditional ones are the best.
We did a pretty comprehensive study where we compared six traditional swing trading indicators. The report is free of charge and you can find the article on this link:
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Understanding the underlying formula for a technical indicator is useful. The IBS, Stochastic and Williams %R are essentially the same indicator.
A one bar IBS = the raw StochK(1,1), a one bar unsmoothed stochastic (multiplied by 100). Williams %R is the "negative inverse (I don't have a better term to describe this)" of the StochK. For example if StochK(5, 1) = 75 the WilliamsR(5) = -25, etc. So it is not a surprise that in your testing you found those 3 to have similar results. Plot the two indicators using the same parameters and you will see identical plots.
You used a smoothed Stochastic so that may result in some difference and you averaged a multi-day IBS in a slightly different way than a multi-day stochastic would be calculated again resulting in slight differences in the backtests.