Best forex indicators
When trading you should look out for the best forex indicators. They were invented to ease forex trading by helping traders to concentrate on their currencies’ values, their live accounts and the most obvious market rates. They are mostly used by beginners before investing in forex trading so that they may gather basic knowledge of forex market. However; for you to be successful you should research on the best indicators that will suit your platform and your needs. They are usually in numerous categories and have various applications. Below I have outlined the list of the 4 categories of indicators that are commonly used by traders to predict their trades.
First and foremost I shall discuss about momentum indicators. They are among the best forex indicators that show the fluctuation of a certain price at a certain timeframe. They are also known as strength indicators. They have the same feature with oscillators because they are able to show whether the forex market is going to be oversold or overbought. In a situation where the indicator acquires the overbought area it shows that there is a high probability that the price will fall. However, if it is in an oversold area it signifies that the prices will rise. Examples of these indicators are Commodity Channel Index (CCI), Relative Strength Index (RSI) and Stochastic. One thing you must not forget is that CCI indicators were invented by a man known as Donald Lambert. Their main purpose is to spot a potential buy or sell. This simplifies the trade that explains why they are known as the best forex indicators.
The second type of indicator that I will talk about is trend indicators. They usually act as a reminder to investors that the trend is the greatest assets in trading and they should conduct their trade depending on the trend’s direction. Some of the best forex trend indicators include moving averages, moving average convergence divergence (MACD), Parabolic SRA, Average Directional Index (ADI) e.t.c. Their work is to help traders to identify the spot where the trend commences and stops.
The third type of indicator is known as Volume indicators. They are highly used because they show the way trading is. They also determine if there will be reasserting of any trade that is if there will be a breakthrough or a reversal. Usually what happens is that the price rises if the volume is increased and the price reverses if the volume reduced. This indicator comprises of Money flow, Acceleration Bands, and lastly the Demand Index.
Finally the last best forex indicator you must use is Volatility Indicators. They are also known as a Band Indicators. They usually explain why the alteration in volatility usually affects the price. That is why most traders usually take advantage of the liveliness of the market by studying them. They will always give you a signal if there is a great opportunity. They include, Bollinger Bands, Average True Bands (ATR) and Chandelier Exit.