Repainting Indicators: What They Are and How to Avoid Them (2024)

Repainting indicators are a type of technical analysis indicator that changes its values as new data arrives. This can make them misleading, especially when used for backtesting or auto-trading.

There are two main types of repainting indicators:

• Current candle repainting: These indicators update their values with every tick on the current candle. This is normal behavior for most technical indicators, and it does not necessarily mean that the indicator is repainting.
• Past candle repainting: These indicators change their signals on past candles. This can happen when the indicator is using data from a higher timeframe to calculate its signals.

Multi-timeframe indicators (MTF) are a common type of repainting indicator. MTF indicators use data from multiple timeframes, which can lead to repainting if the indicator is not properly designed.

There are a few reasons why indicators might repaint:

• The indicator is designed to do so. Some indicator developers intentionally create repainting indicators in order to make them look more accurate.
• The indicator is using data from a higher timeframe. As mentioned above, MTF indicators can repaint if they are using data from a higher timeframe.
• The indicator is not properly designed. If an indicator is not properly designed, it can be susceptible to repainting.

How to Detect Repainting Indicators

There are two ways to detect if an indicator is repainting:

1. Install the indicator on a back tester and closely monitor the signal positions. If the signals change as new data arrives, then the indicator is repainting.
2. Install the indicator on a live chart and closely monitor the signal positions. If the signals change as the market moves, then the indicator is repainting.

The first method is more useful and quick because we can control the back tester (strategy tester) speed and run it for an infinite time on the majority of pairs.

How to Avoid Repainting Indicators

The best way to avoid repainting indicators is to use non-repainting indicators. There are many non-repainting indicators available, so you should be able to find one that meets your needs.

If you must use a repainting indicator, be sure to understand how it works and how to use it properly. You should also always backtest any indicator before using it for live trading.

Conclusion

Repainting indicators can be useful tools, but they should be used with caution. It is important to understand how they work and how to avoid repainting. If you are not sure whether an indicator is repainting, it is best to avoid using it.

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