What Things You Need to Know About Forex Indicators

There is plenty of Forex technical indicators which enable to give you the opportunity to estimate the condition of the market and to make the most exact forecast of the further movement of the prices.

All these Forex indicators can be divided into three groups:

Trend following indicators of trends or indicators

These are effective in the presence of a pronounced trend, but give dangerous signals when the market stands. These include indicators such as, for example, Moving Average, MACD (convergence/divergence of moving averages), ADX index, etc. These indicators are moving when the trend has changed.

Oscillators or oscillators

Show a turning point, but give premature and unsafe signals when the market began its movement. This group includes Stochastic oscillator, Momentum, RSI (relative strength index), Wm% R (Williams % R), etc. Oscillators change frequently before prices.

Miscellaneous indicators or other indicators

These aregiven an opportunity to evaluate the psychological condition and mood of the market. Among them are New High-New Low (index of new maxima and minima), Put-Call Ratio (the ratio of supply and demand), Bullish Consensus, and others may be synchronous or faster indicators. Please note that this group of Forex indicators is used mostly with the sale of futures and options.

In the given section we’ll give the most widespread and, in our opinion, convenient application indicators - those technical Forex indicators on which it is necessary to pay special attention to the creation of the trading system. We shall not give formulas for calculation of indicators as we believe, that the main thing is to the understanding what speaks the indicator and as correlates with by. The description of mathematical calculations can be looked at in the help system of a trading platform.

Also, we wish to notice, that here we give the description of the classical application of indicators which is not recommendations to opening positions. Before applying this or that Forex indicator we recommend studying its behavior in relation to the price independently, try to change parameters, and picking up values that are optimal in your opinion.

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