The Trader or investors should have the proper knowledge of the forex indicators and how to apply them in their support. Many times this can be daunting and confusing for the traders to utilise the trading tools. The common mistake that market players make while applying technical indicators are utilising more than three tools on the price char; therefore, it makes it hard to select. Secondly, several novice traders depend only on technical analysers and forget that all these tools only display the picture of the market and do not analyse the future. The third mistake is don’t blame the indicators when a trade doesn’t gain the profit.
Type of Indicators
There are majorly two types of technical indicators.
- Trending market Indicators:
The trending market means when the price line of a stock is going in the same direction, either downward or upwards.
- Ranging Market Indicators:
The range-bound market means when the price is trending upwards and downwards, in a particular range. It is also known as “Sideways Market.”
All the indicators available in the market are befitted for either of them. Below will understand the top Forex Indicators that are used for technical analysis.
1. Relative Strength Index:
RSI is utilised to compare the quantity of the profits to losses to discover over-purchased and oversold positions of a trading asset. RSI ranges in between 0 to 100 and the instrument is assumed to be oversold when the price line stikes the RSI 30 mark, and so, is likely to surge back in a skyward trend. Same like this when the RSI crosses level 70, the asset is assumed as over-purchased and is expected to convert to the downtrend.
Market Players should also keep in mind that huge demonstrations affect the RSI, and this can give false signals of selling and buying. Further, if the RSI is combined with, like MACD, the results will much better.
2. Moving Average Convergence Divergence:
MACD is a famous technical indicator and consists of two moving averages of distinctive time frames. For short term traders, the timeframe of 30 minutes and four-hour charts are well-known, while for long term traders, typical timeframes are 200 days MA and 50 days MA.
When the short day’s MA, passes the long day’s MA, the price is predicted to fall soon. Same like this, when the long term MA goes below the short term MA, the market players should short sell the instruments.
1. Global TradeATF:
TradeATF is the trading name of Bayline Trading Ltd, which is the leading investment firm. The broker is regulated and authorised by the leading financial institution, Cyprus Securities & Exchange Commission ( CySEC) under the license no. 000188/91. Apart from this, it offers 350+ trading instruments including currencies, stocks, commodities, indices, and cryptocurrency. Some of the advanced features provided by the broker are MetaTrader4 trading platform, low commission charges, high margin trading, dedicated customer support, and the three core account types.
The firm also offers educational and research tools that help the traders in analysing and understanding the dynamics of the financial markets. It allows traders to deposit payments with different payment options.
Most important TradeATF is the safest trading platform as it uses the segregated accounts of the top banks to deposit clients’ funds and also uses the advanced level of encryption technology.
It also offers the best tools for technical analysis that can be an advantage for the traders.
So, these were the best forex indicators. All the indicators are straightforward and hassle-free to apply if traders have the right knowledge of the dynamics of different indicators and how to use them. TradeATF is the perfect broker to start your trading. It also allows customers to open a demo account. Using this account traders can practice the trading methods and understand the fundamentals of the markets properly before starting live trading.