• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Toro Demo Trading

Platform How To

Never invest money that you can’t afford to lose.

RISK WARNING: 68% of retail investor accounts lose money when trading CFDs.

This website is created by fans of the eToro platform. Not by eToro itself.

  • Trading Basics
  • Platfrom Guides
  • Strategy
  • Trading Tools
    • Forex Market Hours
    • Trading checklist
    • Trading Balance Growth Calculator
    • Martingale Calculator + Strategy explained
    • Calculate your first Million
    • Gain-Loss Percentage Calculator
    • Forex Tools for trading
    • Economic Calendar
    • Technical summery Currency pairs Buy and Sell
    • Crypto Currencies top-10 Active Price Movement
  • Video tutorials
  • REGISTER / LOGIN

Leading and Lagging indicators on eToro

eToro platform offers a wide variety of trading indicators for you to choose from and it may be quite challenging to navigate amongst them and choose a few for your trading. There are two generally distinguished groups of indicators, leading and lagging, that differ in the way they are constructed and interpreted. What they are, how they differ and how you can use them in your trading process on eToro platform? You can find answers to these questions in the quick guide below.

Leading and lagging etoro

Contents

  • 1 Lagging indicators
  • 2 Leading Indicators
      • 2.0.1 Which type of indicators to use on eToro?

Lagging indicators

Lagging indicators, also referred to as trend indicators, are ‘backward looking’ and are constructed based on past prices of an asset. They are the most common type of indicators and are used for clarification and confirmation of a price pattern that is already progress at the time as well as to spot suitable entry and exit conditions for trades. As the name implies, these indicators are lagged as they are created by averaging previous price points of an asset and therefore the market may make a move before the indicator spots it. Despite this minor delay lagging indicators may be indicative of the momentum the price is gaining and therefore serve as a confirmation for price action; this could add additional confidence to your trading decision.

Lagging trend indicators can help understanding whether the market is ranging, moving upwards or downwards, or trading sideways. In order to determine how far the price is likely to move before a retracement occurs, traders may consider using mean reversion indicators such as the Bollinger Bands. Examples of such lagging indicators available on eToro are a Simple Moving Average (SMA), Moving Average Convergence Divergence (MACD), Relative Strength Indicator (RSI) and Stochastic Oscillators (on the image below), although the two last indicators can be considered as both leading and lagging indicators.

stochastics etoro

Leading Indicators

Although these indicators are also based on past prices, they are used to foresee future price trends, indicating where to the price is likely to move next. The advantage of this indicator then comes from its ability to potentially indicate a point for traders to enter or exit trades before the actual price move. It is important to remember that these indicators only provide an indication of how the price may possibly move without any certainty; markets are very volatile and at times the price may not divert into the direction of the indicator. You should therefore be aware of incorrect breakout signals, where you may falsely interpret mere retracements as major trend reversal points.

Support and Resistance levels are some of the most common leading indicators. Another good  example of a leading indicator are the Fibonacci retracements which try to forecast future movement of a price; you can also consider Donchian channels, that may be used to assess asset’s volatility, potential breakout and retracement points as well as oversold or overbought conditions, like on the image below.

Donchian channels etoro

Which type of indicators to use on eToro?

By their nature, indicators cannot promise any certitude in their signal but they do provide an indication of possible price movements. Traders that need a fast signal may opt for leading indicators; however, setting a shorter time period on lagging indicators may also increase their responsiveness. There is also a danger of false signals developed by leading indicators, especially in case of very volatile markets and when a trader is relatively unexperienced. You may consider using stop-loss as a way to protect yourself from unexpected price movements in the opposing direction; eToro also offers a more flexible option of trailing stop-loss so that you do not miss out on any trading opportunity.

etoro trailing stop-loss and indicators
(Note: Past performance are not a guarantee for future results)

Traders who prefer to trade longer time frames and want to take advantage of a continuation of a momentum may opt for lagging indicators, with a combination of risk management techniques. The issue with lagging indicators is the fact that they are delayed, and because of this waiting period there is a danger of being late for a few pips. This a cost some traders accept to be able to see a simplified clear indication of price action.

As you can probably see, one type of indicators is not better or worse than the other, and the choice depends on your personal preferences, trading strategy and time frame. There is always the option of using several indicators in combination, for example support and resistance levels with an oscillator. The exact classification of whether the indicator is lagging or leading is likewise not as vital as the way in which a trader uses and interprets it, as well as incorporates the right risk management tools, such as position sizing or stop-loss.

Hopefully now you have a better understanding of what the two types of indicators, lagging and leading, are and how you can use them on eToro. Beware that trading involves capital loss risk and enjoy trading on eToro! Best of luck.


Support us by using the eToro sign-up form down below.⬇️

Plus you will get a Free demo account! Thank you!??etoro sign-up form

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eToro is a multi-asset platform that offers both investing in stocks and crypto assets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorized and regulated by the Cyprus Securities and Exchange Commission.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity-specific information about eToro.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

You might also want to read

Research eToro

Market Research on Etoro

Understanding market fundamentals and factors that that affect price trends of your traded assets is … [Read More...] about Market Research on Etoro

eToro customer service demotrading

The Ultimate eToro Customer Service Review

  Customer service is a major part of every product, especially in the FinTech sphere. … [Read More...] about The Ultimate eToro Customer Service Review

Dollar cost averaging strategy

Dollar-Cost Averaging: a Legitimate Strategy on eToro?

With the rising popularity of trading worldwide there are many strategies available and advertized … [Read More...] about Dollar-Cost Averaging: a Legitimate Strategy on eToro?

Day Trading vs Swing Trading

Swing Trading or Day Trading: Which is Your Trading Style?

The stock market is among the most unexplored industries that have great potential concerning making … [Read More...] about Swing Trading or Day Trading: Which is Your Trading Style?

CopyTrader eToro

eToro Copy Trading: Trading like the top traders

Copy Trader: Trading like the best performing traders on the platforms One of the eToro platform's … [Read More...] about eToro Copy Trading: Trading like the top traders

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

thirteen + 12 =

Primary Sidebar

Open Free eToro Demo acount Now!

etoro sign-up form

RISK WARNING

68% of retail investor accounts lose money when trading CFDs. 

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

Trending Posts Now

  • eToro trading
    eToro Club Tiers – Why and what to know about them
    October 25, 2020
    By Bart Bregman | 0 Comments
  • Etoro Review
    eToro Review 2020 – The Lazy Traders’ Guide to Know Everything
    October 26, 2020
    By Bart Bregman | 0 Comments
  • Fees and commissions
    eToro Fees and Commissions
    October 26, 2020
    By Bart Bregman | 0 Comments
  • Trading Balance Growth Calculator
    Trading Balance Growth Calculator
    December 7, 2020
    By Bart Bregman | 0 Comments
  • Leveraged trading
    Trading using Leverage on eToro
    November 1, 2020
    By Bart Bregman | 0 Comments
  • EMA Indicator
    Guide to Effective Trading Using the EMA Indicator on Toro Demo
    February 23, 2021
    By Bart Bregman | 0 Comments
  • Shorting, Selling and Closing
    Short selling and closing on eToro – What’s the difference?
    November 20, 2020
    By Bart Bregman | 0 Comments
  • Candle Patterns
    Most Traded Candlestick Patterns on eToro
    April 4, 2021
    By Bart Bregman | 0 Comments
  • cfd profit etoro
    Calculate Your Profit – CFD Trading On eToro
    December 4, 2020
    By Bart Bregman | 0 Comments
  • etoro chart tool
    Chart Your Course To Success On eToro
    November 30, 2020
    By Bart Bregman | 0 Comments

Footer

  • About Us
  • Contact us
  • Sitemap
  • Earnings Disclaimer
  • Privacy Policy
  • Privacy Policy – Toro Demo Trading app
Bear Markets eToro

Despite bear markets being a natural period of a market cycle, it may be hard to anticipate such … [Read More...] about Trading in a Bear Market on eToro

Long Term Chart Patterns

In the forex and stock market industry, prices will always fluctuate in a consolidation or … [Read More...] about Top 5 Candlestick Patterns for Long-Term Trades on eToro

eToro portoflio planning

Many investors are looking for a long-term investment opportunities that would be optimal to their … [Read More...] about A Step-by-step approach to eToro portfolio planning

eToro portfolio balance

It may be easy to think that a long-term investment into a portfolio of assets is a one time 'do and … [Read More...] about How to re-balance your eToro portfolio?

Flag Pattern

If you’ve ventured into trading, you’ve likely encountered candlestick patterns. Candlestick … [Read More...] about Understanding Flag Patterns and How to Use Them On eToro Trades

Grow etoro portfolio

Some investors are able to generate returns on their investments without their portfolios growing … [Read More...] about 7 strategies to Grow your portfolio

GENERAL RISK WARNING
The trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds.
You should never trade money that you cannot afford to lose.
Please Be aware that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
68% of retail investor accounts lose money when trading CFDs.
Copyright © 2022 Torodemotrading.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

en English
af Afrikaansar Arabicbn Bengalibg Bulgarianzh-CN Chinese (Simplified)zh-TW Chinese (Traditional)cs Czechda Danishnl Dutchen Englishet Estoniantl Filipinofi Finnishfr Frenchka Georgiande Germanel Greekhi Hindihu Hungarianid Indonesianit Italianko Koreanms Malayno Norwegianpl Polishpt Portuguesero Romanianru Russianes Spanishsv Swedishth Thaiuk Ukrainianur Urduvi Vietnamese