There are a plethora of ways in which Forex Indicators can be deemed useful. Embedded right at the trading software, these indicators can provide the proper assistance to the traders in every possible manner. Whether you are looking for a short-term or long-term forecast, there’s always an indicator for you. So, in this article, we will discuss some of the best indicators that you can use while trading.
Based on the traders’ preferences, tons of technical indicators are available. However, it is imperative to understand that there is no single indicator that reigns above all. Based on the trader’s trading style and psychology, you can choose the right fit for you. So, some of the most prominent indicators include:
The moving average is one of the leading and most beloved trading indicators of all time. It identifies the breaks in price action and predicts a generalized direction for the market. Expressed in the form of a single line, it often overlaps on the chart. Traders can also set the timing to predict the right change.
Oscillators are one of the best indicators for predicting the correction for the current trends within the market. For instance, if the price goes too high, then the oscillator can foresee it being overbought. So, either the market will stabilize itself or slide downwards.
Stochastic oscillators indicate overbought and oversold zones, with the addition of also pointing out price reversal. While you can find many stochastic oscillators out there in the market, slow stochastic is the most common. These oscillators are bound by 0 to 100 within the chart. Lastly, investors can also use stochastic to find the entry and exit points.
Fibonacci Retracement Lines
The retracement lines are a part of the entire set of tools based only on the Fibonacci sequence. The idea behind this technical analysis is to provide support and resistance level over any trading instrument. You can use this great indicator effectively when paired with stop loss.
Next on your trading software, you should consider adding the Bollinger band. These are most effective in setting up the current market strategy once the price band surpasses the moving average. Bollinger bands are 2 to 2.5 standard deviations from that of a simple moving average for the most part.
Average True Range
It is most effective when figuring out the volatility of the currency pair. Since it is directly related to the market movement, it is one of the most effective indicators to determine reversal. Simply put, a lower ATR indicates lesser volatility and vice-versa.
The Bottom Line
You can find a ton of usage for indicators when it comes to Forex trading. However, at the same time, without prior knowledge, it can also get complicated at times. Here, automated trading software from Kemistri comes to save the day. Even without giving any second thoughts, you can start trading and make money right away.
Sam Edwards is a content writer who lives in Tunbridge Wells. He is working for Deepak Shukla. When he is not writing, he can be found grabbing a coffee or playing guitar.