Posts Tagged ‘Indicators For Forex Trading’
If a person really wish to enter the biggest trading market, FOREX market and is waiting for an obvious point at which he can enter then for the long time he will find himself sitting at the sidelines, being useless, doing nothing. If a person studies certain indicators for FOREX before start trading then for choosing profitable times he can determine suitable strategies. These indicators give strong signals of buying and selling if they are continually monitored. If a person makes an investment then he tries his best to minimize the risk of loss and this can only be done if the data are strongly analyzed. These indicators analyze the data and help in minimizing the risk of potential.
There are many indicators for FOREX Trading that can be used to analyze the data but the most commonly used and the most popular indicators for FOREX are mentioned below:
• Moving Average Convergence Divergence. (MACD)
• Slow Stochastic Indicator.
• 200 Exponential Moving Average.
Moving Average Convergence Divergence (MACD) is one of the most powerful indicator and most reliable indicator amongst many indicators for FOREX Trading. It is an indicator for FOREX Trading developed by the person who has written around 12 books regarding investment strategies, Gerald Appel. MACD is in fact a very simple tool to use. What it does is that for the past data it analyzes and displays chart. It is also knows as ‘lagging indicator’.
MACD can also be used as a leading indicator at times which helps in predicting the next movement of the prices. The difference occurring between any two moving averages at certain time is calculated and displayed by MACD. Moving averages moves as the market moves. For MACD, 12,26,9 is the standard indicator setting. This setting is used in numerous trading systems. For both, faster and slower moving markets, this setting of MACD is considered to be most suitable, even by its developer Gerald Appel. 12 EMA (Exponential Moving Average) and 26 EMA are considered as standard.
The second well-known indicator for FOREX Trading is Slow Stochastic Indicator. It is especially used by traders for their entries and exits. It is developed by George Lane. It is a momentum oscillator and it consists of two lines known as %K (Fast line) and %D (Slow line). The scale on which it is plotted is between 1 and 100. In Stochastic, when the lines pass through ‘trigger levels’ it suggest the overbought or oversold of the market.
200 Exponential Moving Average is the third widely used indicator. They measure the average movement of price during a certain time period and it simply smoothes out the data of price which allows us to see tendencies and market trends.
All these are great indicators but a trader should not just rely on one instead he should use all of them as a confirmation before taking a perfect move.