Three most effective trading indicators for Forex traders - Dailyforextrading.net

Mathematical indicators were invented at the very beginning of the technical analysis, long before the creation of computer charts.

The first indicators were just a mathematical formula according to which the price average values were calculated, next, they were plotted as dots in paper price charts and connected with lines.

Modern indicators are not very different from those early tools. A modern indicator is also a mathematical formula presented by the software shell that is automatically plotted on the computer price chart.

It is a bit more complex than the calculation of the support and resistance levels, isn’t it?

This article describes forex online charts with the attached indicators. I will explain how to employ technical indicators to make money on trading Forex. As of now, all indicators are grouped into two major types, based on the principle of their use.

1. Trend indicators are tools aiming at defining the ongoing trend and how long this trend should continue;
   
   
2. Oscillators are the indicators used not only to define the trend itself but also to identify the trend stage and to receive the trading signals to buy or sell in the trend.
   
   

The above chart displays both types of indicators. Trend indicators are always directly in the working space. It is natural as they must be following the trend (the price chart). The oscillator is in the separate window below the chart.

The price chart is not so important for its work. The trend indicator in this chart is Bollinger Bands, and the oscillators are presented here by the MACD histogram indicator.

Among the common indicators widely used, these two are worth paying attention to, they are more effective in practice than other indicators.

Well, let’s get down to business and find out the best indicators to trade forex. There is the top chart of the three best Forex trading indicators

Number 3. Momentum

Momentum is one of the oldest oscillators. It had been first mentioned before computer analysis was introduced. That is why it is very simple. This is a forex price prediction indicator.

1. To start working, you need to sign in to your client profile and click on the Trade tab on the left panel. There is a huge choice of trading instruments, ranging from currency pairs to stocks or metals CFDs.
   
   
2. As all indicators perform quite well in trading high-liquid trading instruments which a represented in the list of currency pairs, let’s select them. For example, it can be the major currency pair, the EURUSD. To open the chart of this pair, you click on its card on the Trade menu.
   
   
3. To attach the indicator to the price chart, you need to click on the Indicators tab at the top menu of the price chart.
   
   
4. Now, we select the needed indicator from quite a huge list of indicators. We will make a profit from Forex trading using the Momentum oscillator, a very popular forex market sentiment indicator mt4.
   
   
5. After you click on the indicator, it will appear in a separate window, below the price chart. Before you get started, you need to customize the indicator. Click on the small arrow on the right side of the indicator name;
   
   
6. There will open the settings window, where you can format the period of time over which the price movements are averaged (the MA length) and the source type (close, it means the closing prices are analyzed). You shouldn’t change the Source box, and the length will be 35.

Number 2. Alligator

This is also a trend indicator, so, it is located directly in the price chart. The indicator is quite simple compared to other forex market sentiment indicators; it was designed by Bill Williams based on the combined signal of the three simple Moving Averages, it can be a trading system as well. Well, that will do for the theory of the forex swing trading indicator, let’s start making money.

Number 1. Awesome Oscillator (AO)

This forex prediction indicator MT4 is one of the best to be used in the forex indicator strategy. This oscillator is designed to deliver trading signals of the divergence which is the strongest sign of a soon trend reversal and trend pivot level in technical analysis. Well, let us start spotting divergence and make profits! Continue reading with Litefinance.com