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[Oluti]

Many traders bemoan the fact that the indicator they are using does not signal an entry on the first few pips of a move. They condemn the indicator for “lagging behind the market”…that is, signaling an entry after the initial move has begun.

Keep in mind that it is the very nature of indicators to lag the market.

All indicators, RSI, MACD, Stochastics, Moving Averages, etc., are going to be lagging to a greater or lesser degree since they are based on an average of price action that has already taken place. The result is that pips can be left behind since the initial part of the move has taken place before the entry signal is generated.

The longer the time frame of the chart and the greater the amount of periods comprising the indicator, the more reliable it will be since the signal is derived from a greater amount of data. While shorter time frames and fewer periods will generate more entry signals, because they are based on a lesser amount of data, more “false entry” signals will likely result.

Even though every trader would like to be in on the very first pip of a move, in my opinion, it is fine to miss the initial move that a pair makes in favor of entering a trade that has a greater level of confirmation behind it.

And therein lies the benefit of the lagging nature of indicators.

If we are looking to enter a trade at the very first sign that a move may be taking place, we are going to find ourselves entering many trades based on very short term signals and a low amount of data.

While we will give up some pips at the beginning of the move, this lagging aspect of indicators will get us into trades that have a bit more confirmation behind them based on the greater amount of data.

In other words, the indicator will force us to wait a bit before entering.

Let’s take a look at the historical 4 hour chart of the CADJPY with the MACD in place below…


If a trader had based their short entry on the MACD crossover, when the MACD line (red) crossed over the Signal Line (blue) to the downside, they would have given up the pips between point A and point B on the chart…about 26 pips.

However, inasmuch as the downward momentum signaled by the MACD cross was in place, there was the greater likelihood that the bearish move might follow through. As it turns out, it did; posting a gain of 220 pips between points B and C.

While this type of confirmation will not translate into a winning trade each and every time, waiting for the move to “mature” a bit before entering will result in taking higher probability trades.

Bottom Line: I would rather enter later and be right than enter earlier and be wrong.

 

[lioralace]

Lagging indicators get a bad rap, don’t they? Every newbie trader wants that magic bullet—something like a hyper-caffeinated RSI that’ll shout “BUY NOW!” before the move even begins. Spoiler: Nope. Doesn’t exist. And honestly, thank God for that.

People always whine about their MACD or Stochastic signals showing up “too late,” as if that’s some kind of design flaw. Like the indicator should leap off the chart and predict the future. Sorry, buddy, it’s not a psychic hotline—it’s math based on price history. Every indicator is playing catch-up with what already happened, not what might happen. That’s literally how they work. And yes, especially if you’re using those big ol’ 50-period moving averages on the daily chart—man, you’re REALLY gonna get lag.

But let’s get real: lag’s not a bug, it’s actually their best feature. You want that delay, believe it or not. It keeps you out when the market’s just faking people out, tossing around head-fakes like it’s the NBA finals. Jump in at the very first twitch of a move, and yeah, sometimes you’ll nail the dead bottom or top...but way more often you’ll get whipsawed, stopped out, and left cursing at your screen (ask me how I know). Catching those “super early entries” usually just means you’re signing up to be cannon fodder for all the smarter players who wait for actual proof.

See, on those tiny timeframes? Sure, you’ll get a faster signal. You’ll also get a higher chance of a total fakeout—because the data’s thinner, and noise looks a heckuva lot like signal when you squint. Like trying to read tea leaves mid-earthquake.

But wait for confirmation—using indicators that lag a touch—and suddenly you’re playing with the probabilities in your favor. That MACD crossover on the 4H? Maybe you missed the first chunk of pips, but who cares if you grab the fat part of the move? Would you really rather “be first” and lose money, or be a little late and pocket 220 pips while everyone else is still arguing on Reddit about whether it’s a bull trap?

Honestly, it all boils down to trade-offs. You want to feel like a market ninja and catch the first flash? Enjoy those confidence levels hovering around 30%. The pros aren’t chasing shadows—they jump in once the trend is for real, riding that sweet-spot middle of the move. Chasing tops and bottoms is amateur hour. Trust me, I’ve been there, and my account balance can prove it.

And, let’s be honest, waiting isn’t just smart—it’s survival. Lagging indicators kind of force you to chill out, stop acting out of FOMO, and wait for something solid instead of YOLO-ing your capital every time the market twitches. That pause? That’s discipline. If you can’t stomach missing out on the first move, then trading probably isn’t for you.

So yeah, being “late” to the party? I’ll take it all day. I’d rather stroll in fashionably late, drink in hand, money in my pocket, than be the guy who showed up early only to find the bouncers (aka, market makers) tossing him right back out.

Embrace the lag, trust the confirmation, and quit trying to be some kind of market fortune-teller. Play the game to win, not to be first.

 

[kerryjoy]

The lagging of indicators used to irritate me as well. I believed that the secret to winning was to watch every move from the start. However, I eventually came to the realization that I was just jumping in with very little confirmation, and yes, that resulted in a lot of false starts. I don't mind missing the first few pips now. To feel more secure about the trade, I would prefer to wait for that MACD crossover or RSI confirmation. It's similar to waiting for the market to reveal its hand before I play mine. I've discovered that catching the right moves with better odds is more important than catching every move.