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4. Indicators can be broadly categorized into leading or lagging indicators in the Forex and nearly any market. Each has its own set of strengths and weaknesses for using as the basis for a trade.Predominantly the leading indicator gets a trader in the earliest though often at the expense of being a false start signal while the lagging indicators are often considered more accurate though may be too late to the party to take the desired profit.Images courtesy of google.com Your Indicators Purpose 5. In general, Oscillators comprise the majority of leading indicators.The most commonly used include Stochastic, Parabolic SAR and Relative Strength Index (RSI).These are selected for their ability to show a trade at the very earliest point of entry, and when working in harmony as below, can be a very powerful tool. Image courtesy of babypips.com Leading Forex Indicators 6. This theory appears wonderful at first sight such as the prior slides image of harmony.But in reality, many leading indicators, as we know, generate false starts.Putting them on one chart you can see that there can be many times that they produce no clear answer for the direction of a trade. This occurs as all are oscillators are leading indicators, but based on slightly different calculations (or else they would be the same indicator).Though, as with all science, no clear answer Is an answer in itself maybe there is no trade to take! Leading Forex Indicators 7. Momentum indicators are lagging indicators as they demonstrate the momentum of a trend that is already occurring, not generally the precise beginning of that trend.Among the more popular momentum indicators are Average Directional Index (ADI), Bollinger Bands, MACD and other variations of Moving Averages. Image courtesy of babypips.com Lagging Forex Indicators 8. Though some more cautious traders may use lagging indicators as the primary indicator for trade entry, it is often used as a confirmation to a leading indicator for entry as well as a method to follow the trade entered to determine when the trend is no longer moving in the traders favor therefore a point of exit. Images courtesy of google.com Lagging Forex Indicators 9. In a perfect world, when rain is forecasted, it comes on time just as a leading indicator would hope to work.You could of course wait until you awake to see water hitting your window pane or drenching you on your lunch break to buy into the hype as lagging type. Or when the rain stops you exit; of course it may just keep raining 5 minutes later so neither indicator is guaranteed.AGAIN, its all about testing the way you use your indicators in a consistent regimented fashion! Images courtesy of google.com Using Leading and Lagging Indicators 10. If you're using all your signals you are likely to get mixed signals.But if you have chosen a fairly reliable tested set of signal and still getting mixed signals, you're better off doing nothing.Sit on your hands an watch the volatile storm live to trade another day!Closing Notes 11. Maximize Profit in 2011 Tuesday, Jan 25th: 7pm EST https://www1.gotomeeting.com/register/574619145 12. Are you part of the FxEdge Family? Become a Fan of myfxedge.com on Facebook and get free tips! 13. 14.