What does "repainting" in Forex mean?
Repainting in Forex is a common expression referring to the repainting (or re-drawing) of a technical indicator.
A repainting indicator is an indicator that changes it's display about data as new price data (candles/bars) comes in. An example of this is the Zig Zag indicator which will change past placements as new price data comes in.
Why is it bad?
It's bad because the information is not reliable. A repainting indicator gives off the impression that the information that the indicator is displaying is highly accurate when it's not.
That saying, experienced traders who know how to work with certain repainting indicators such as the Zig Zag understand that this tool repaints, and is not an issue for them, as they will be using the Zig Zag as confirmation (confluence) with other technical analysis tools, fundamentals, price action or non-repainting indicators.
Why do indicators repaint?
Indicators will repaint due to a variety of reasons. Usually due to:
- Incompetent coding
- Being purposely designed to repaint (by scammers) in hopes that unassuming traders will fall for the backtests or the "examples" then purchase this indicator
- Cannot be coded as a non-repainting indicator
Are there any good non-repainting indicators?
Sure. Trusted coders like Mrtools and Mladen are specialists in developing non-repainting technical indicators, so it's always best to try and find a specific indicator made by them first, before you look for alternatives.
You can find a list of our most recommended non-repainting indicators here: Top 10: The Best Non-Repainting Forex Indicators for MT4 that really work.
How do you know if an indicator repaints?
The easiest way to find out if an indicator repaints is to:
- Place the indicator on a 1 minute chart
- Observe if it changes it's readings later as new price data comes in
As new price data comes in, do the arrows on the chart dissappear? Does the Oscillator change it's crossings or slopes later on after a few candles? These are common signs of repainting.
If you're ever in doubt, post your indicator here: Does this indicator repaint? and our members will be able to confirm if it repaints or not.
Can you show me an example of how this looks like on a chart?
Yes. Below is an example of a repainting "arrow" type indicator from here.
In the animation below we can see that:
- The Green arrow tells us that we have a BUY signal
- After a few red candles the indicator repaints and will remove it's past BUY signal indication and replace it with a Red arrow to show a SELL indication
- The BUY signal is completely removed by the indicator (to make it look like it wasn't wrong and to look good in backtesting results)
I hope this answers trader's questions on what a repainting indicator is. We often get a lot of e-mails from new traders who are asking these questions so I've decided to respond by posting this up for those who are wondering what repainting is.
Mods if I've missed anything, please edit the post