What is the Best Technical Indicator in Forex?

Baby Pips Elementary - Grade 5

What is 'backtesting' in trading?

Retroactively testing the parameters of indicators and strategies against historical price action.

Which indicator performed the BEST in the 5-year backtest?

Ichimoku Kinko Hyo (approx. +30% profit).

Which indicator performed the WORST in the 5-year backtest?

Stochastic (approx. -20% loss).

Besides Ichimoku, which was the only other indicator to post a profit in the backtest?

MACD.

What significant negative factor did all tested indicators share?

They all experienced substantial drawdowns (between 20% to 30%).

What does the text conclude about using technical indicators based on these results?

They are rarely profitable enough to be used on their own and should be combined into a system.