In Forex trading, the terms “paint” and “repaint” refer to how indicators behave on a chart, particularly with respect to how they update or change their signals as new price data comes in.
Paint Indicators
These are indicators where signals or lines are drawn on the chart and do not change once they are set. Once a bar or candle closes, the indicator’s value for that period is fixed.
Example
A Moving Average (MA) on a daily chart. Once the day’s candle closes, the MA value for that day is set based on the closing price and does not change until the next day’s candle closes. This makes them reliable for historical analysis because their past values remain constant.
Repaint Indicators
These indicators can change their signals or lines even after the bar or candle has closed, based on new price data. This can lead to confusion or false signals if not understood properly.
Example
- ZigZag Indicator: This indicator is designed to connect significant highs and lows in price movements. However, it might repaint because it looks for the next significant high or low, which might not be known until several bars later. If a new high or low forms, the previous ZigZag line might shift to connect to this new point, effectively “repainting” its previous path.
- Renko Super Signal Indicator: This type of indicator might show a buy or sell signal, but as more price data comes in, these signals might disappear or move if they were based on conditions that changed with new price action.
Key Differences
Key Differences:
- Reliability for Historical Data: Paint indicators provide a stable historical data set because once a signal or line is drawn, it doesn’t change. This stability is crucial for backtesting trading strategies. Repaint indicators, due to their nature, can make historical data misleading if not used with caution.
- Real-Time Trading: In real-time trading, repaint indicators might offer more dynamic signals, which could be beneficial for very short-term trading or scalping, where traders might look for the most current signals. However, this comes with the risk of signals changing, which could lead to confusion or missed opportunities if not monitored closely.
- Trading Strategy: For Long-Term or Swing Trading: Traders might prefer non-repainting indicators for their stability, ensuring that the signals they based their trades on remain valid over time. For Day Trading or Scalping: Some traders might use repainting indicators for their ability to adapt to the latest price movements, though this requires a deep understanding of how these indicators function to avoid being misled by changing signals.
- Verification: To check if an indicator repaints, traders often use very short time frames (like 1-minute charts) or use features like “bar replay” in platforms like TradingView to see how the indicator behaves over time. If signals disappear or move significantly, it’s likely a repainting indicator.