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Three indicators forex experts use

Discussion in 'Beginners Forum' started by kaiceaziz, Oct 8, 2013.

  1. kaiceaziz

    kaiceaziz

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    Technical planning , learning and analysis is not only reading the forex charts. Charts are part of the analysis operation, but price trend in the market is just a case among many cases. Technical indicators or studies enable us to know the price movement in a certain period of time. They indicate whether the trend is strong or it might fall into reverse. They can even predict the next price move of a pair.

    Every forex trader may choose his desired indicator. But most professional traders concider that there are three indicators that every forex learner must use:

    1. Moving Average Lines

    Moving average lines are very important indicators that make us know what is the trend looks like. It helps us to know whether it is bullish, bearish, or nonexistent. It shows two levels, support and resistence. At the support level, the price is about to move higher when, at the resistance level, the price is likely to start falling.

    2. Bollinger Bands

    Bollinger Bandsare trading bands that are placed around a currency price and the 20-period moving average line. They let us whether a currency of pair is trending and the points at which a price trend may reverse. Bollinger Bands are very important for showing support and resistance along with the level of volatility in the market. Support is more likely happened at the lower Bollinger Band while resistance can be found at the higher Bollinger Band.

    3. Average Directional Index (ADX)

    This indicator also can be used with both moving average lines and Bollinger Bands. The ADX shows the strength of the move the price. And that shows how long a trend may survive, it is likely to continue moving positively. If it is weak, it is likely to reverse. Traders have different . The ADX level that is below 10 shows that the pair is weak and trending negatively . An ADX level above 30 shows somehow strong trend. An ADX above 40 indicates a highly strong trend.

    Beginners may face a lot of indicators to choose from. I advise to use the above mentioned indicators, along with the candlesticks, and happy earning to all.
     
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  3. gkintl

    gkintl

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    Of those indicators you have mentioned, ADX is very much useful as a trader. It is one of those few indicators which can show trend strength as well as direction of price movement of an asset. Thus it is always used by traders either alone or in combination with other indicators. Bollinger bands can be used both to trade a trending and a range bound market. However, to identify whether market is trending or range bound, ADX indicator is very much needed. Moving average is very much useful only for swing, medium and long-term traders as lag makes it impossible to trade extremely short time frames.
     
  4. Pettyeve

    Pettyeve

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    @gkintl just as you have rightfully stated. I'm sure that traders will want to identify the strength of the trend. Traders will want to know the momentum of the trend ands major trend also. The ADX is a very necessary indicator for traders who are no longer newbie traders that will prefer rsi and ma.
     
  5. Decub

    Decub

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    Yeah, they are quite some good list there. The Moving Average can quite be used by both a professional trader and the newbie. I even think the newbie would need it more. Though in all, a trader's choice of an indicator is a function o the one he understands well other better.
     
  6. Lee Mark

    Lee Mark

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    Basically, using trading indicator is not a bad thing; but the problem is depending on it! Trading is not only trading indicators, it’s all about technical and fundamental analysis! So, traders should focus on the whole scenario rather than the indicators.
     
  7. Max Trade

    Max Trade

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    Some unfortunate losses and unsuccessful trading can make us discourage and emotional , if your trading guidance by a professional trader of there is a great chance to come out from recent losses very rapidly.
     
  8. anna.serea

    anna.serea

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    thank you, sir, for sharing important knowledge in forex.
     
  9. Tom Latham

    Tom Latham

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    Well; right now I am using only moving average trading tool; besides I practiced with BB in my demo. Basically, my main strength of trading is Price Action.
     
  10. Svetlana Loboda

    Svetlana Loboda

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    In my initial stage; I was so much excited on trading indicator but now I am not! Know why? Because I know the reality! Chart reading skill is much meaningful than depending on any trading tool!
     
  11. Tom Latham

    Tom Latham

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    I must say; moving average is the BEST. It shows the dynamic support/resistant levels so perfectly! In my chart; I am using only this trading tool.
     
  12. bolide

    bolide

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    I use combination of RSI, Moving Average and Bollinger Band. I dont need to mention that I also rely on long term support and resistance lines in my analysis