What is the best indicator?

All indicators used are derived from five simple core pieces of information: OHLCV. It doesn’t matter how complex the adaptation of these simple numbers, the fact remains that all indicators, all formulas, all explorations, all system tests, etc. rely on OHLCV data. To clarify, moving averages (adaptive or not) are based on this data, OBV is based on this data, RSI is based on this data, Bollinger Bands are based on this data, ATR is based on this data, etc.

What this means is that before you (or anyone else) tries to implement some fancy, all-singing, all-dancing trading system you must understand how the system is 'interacting' with these five core data elements. Take for example, a very smart person who realized the limitations of MetaStock rewrote an indicator so it worked faster. The code still looked for the same things: Price and MA crossovers, but was just presented in a slightly different way. It worked great because the number of calculations required was reduced.

Do you see the differences in the following code written by MG Ferreira?

C>Mov(C,20,S)

and:

C*20 > Cum(C)-Ref(Cum(C),-20)

It demonstrates the importance of fully understanding what the indicators mean, how they are derived and, finally, how they can be exploited. Every indicator has its capabilities and limitations. Before people make trading decisions based on indicators, they must take some time to really understand down what road they are sending their money.

Note: DO NOT blindly copy someone else's code and trade it, then complain when you lose! Beware of black box systems, and password protected indicators!