Before using any technical indicator in the real trading, a trader has to make sure that the tool he's selected gives the correct trading signals without delay. In case it turns out that the technical indicator redraws its earlier trading signals, the trader may suffer big losses, including the loss of the initial deposit.

What is “redrawing” and why is it so dangerous for a trader?

Indicator redrawing is a situation when historic data, early generated by the indicator and corresponded to the bars which are already formed on the chart, unexpectedly for the trader, change their values. The main idea is that if the bar is not yet fully formed on the chart, the indicator signals may be changed in accordance with the changes in the chart bars. But when the bar is fully formed and closed, the indicator signals should remain the same. The phrase "the indicator redraws its signal values" is said only in a situation when the indicator continues to change, although the bars have already closed.

Here is an example of a typical indicator redrawing: the indicator provide a signal to open a buy-trade. The trader opens the position, but after some time the indicator changes the signals, and it turns out that the trader had to open this trading position later than he did. The traded lose his money.

To avoid such situation in trading in the Forex market, you have to use the technical indicators without redrawing, as they gives the most accurate signals to trade.

The main advantage of such indicators type is that they allow trader to fully estimate and analyze the price values of a trading asset, based on its previous historic quotes.

Most popular Forex indicators without redrawing

Fibonacci retracement levels

Fibonacci retracement levels are based on the theory derived by an Italian mathematician Leonardo of Pisa. This theory applies not only to working on financial markets, but also to other fields. Fibonacci levels can be seen in many natural phenomena.

In real trading there is no price trend, which would last forever. Fibonacci levels allow a trader to determine in which direction the trend will be correcting and accurately calculate the price support and resistance levels.

For good reason the Fibonacci levels are considered as the most constant indicators without redrawing: the trader manually stretches the Fibonacci grids, so the indicator cannot be redrawn a priori.

Moving average

The moving average is a line that goes along with the price fluctuations on a chart and reflects the average price of trading asset over a certain period of time. The indicator based on the moving average is especially effective in case of a pronounced market trend and allows filtering random price fluctuations.

Sometimes in real trading it happens that the moving average redraws its trading signals, but this is only observed when trading at short time periods.

Bollinger bands

Bollinger bands allow traders to accurately determine the volatility of a trading asset by using three lines. The top line is nothing more than a moving average. The principal difference of this technical indicator is that it shows not only the direction of price changing, but also the nature of its movement and its intensity.

Indicators without redrawing show 100% correct signals based on the trading asset history. However, like any other indicators, it is recommended to test it on a demo account before trading on a real one.