Repaint vs non-repaint indicators, advantages and disadvantages?

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<p id="isPasted">Repainting indicators can alter their past signals as new data comes in, which can be misleading, especially when backtesting. Non-repainting indicators, in contrast, provide stable signals because their values are fixed once a bar closes, making them more reliable for analysis and real-time trading.&nbsp;</p><p><strong>Repainting indicators</strong></p><p>These indicators, such as the ZigZag or Fractals, recalculate their values on past or closed bars, and as a result, signals can disappear or change over time.&nbsp;</p><p><em>Advantages</em></p><ul><li><em>Idealized view: Repainting indicators like the ZigZag can be useful for seeing an idealized picture of major price swings, which can help traders identify potential support and resistance zones.</em></li><li><em></em>Visual clarity: By filtering out smaller fluctuations, they can give a clearer, though often misleading, visual of the overall trend.</li><li>Backtesting illusion: They can appear highly accurate when reviewing historical charts, as the indicator has "rewritten" history to fit the price movements perfectly. </li></ul><p><em>Disadvantages</em></p><ul><li><em>Misleading signals: The biggest risk is the unreliability of their signals during live trading. A buy or sell signal may appear and then vanish, leading to false entries and potential losses.</em></li><li><em></em>Faulty backtesting: Because they change historical signals, repainting indicators can create a false sense of success during backtesting. A strategy that looks robust on historical data can perform poorly in a live market.</li><li>False confidence: New traders can be lulled into a false sense of confidence by the seemingly flawless historical performance of a repainting indicator. </li></ul><p><strong>Non-repainting indicators</strong></p><p>These indicators, which include most standard tools like Moving Averages, RSI, and MACD, do not alter their values on closed bars. Once a signal is generated, it is permanent.&nbsp;</p><p><em>Advantages</em></p><ul><li>Accurate backtesting: The signals generated during backtesting are identical to the signals that would have been seen during real-time trading, providing an honest assessment of a strategy's historical performance.</li><li>Signal consistency: Once a signal appears, it does not disappear or change. This provides a stable and consistent basis for making trading decisions.</li><li>Enhanced risk management: With a reliable, unchanging signal, traders can more confidently set risk parameters like stop-loss and take-profit levels.</li><li>Improved discipline: The reliability of non-repainting indicators promotes better trading psychology and discipline, as traders can trust the signals without worrying about them suddenly changing. </li></ul><p><em>Disadvantages</em></p><ul><li>Delayed signals: Non-repainting indicators often wait for a price bar to close to confirm a signal, which can cause a slight delay in trade entry compared to some repainting tools. This is the necessary compromise for a stable signal.</li><li>Potential for whipsaws: Because the signals are fixed, they may not adjust as quickly to sudden reversals. A non-repainting indicator might generate a signal that, in hindsight, would have been avoided by a repainting one.</li><li>Lagging nature: Most non-repainting indicators, which use historical data, are inherently lagging. They confirm a trend that is already in motion rather than predicting it.</li></ul>