Posts Tagged ‘indicator’

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Explaining Parabolic SAR for Forex Traders

This indicator was developed by Welles Wilder. This indicator is used in technical analysis to identify an existing trend as well as reversal. Instead of a separate indicator window, this indicator is plotted above and below the price as a series of dots. When dots appear below the price, it is time to buy. When dots appear above the price, it is time to sell. This indicator does not work well in ranging […]

Explaining RSI (Relative Strength Index) for Forex Traders

The RSI is a momentum indicator. This indicator is used to measure overbought and oversold conditions in the market. It is used in stocks, forex, and commodities trading. This indicator was first developed by Welles Wilder. When RSI goes below 30, then the market is considered oversold, and it is a signal to buy. When the RSI goes above 70, then the market is considered overbought, and it is a signal to sell. […]

Explaining Bollinger Bands for Forex Traders

When you are looking for a technical indicator for measuring the volatility of the market, then you can learn about Bollinger Bands. You can look for it in your MetaTrader platform and include it in your chart. This indicator was introduced to the world of technical analysis by John Bollinger. There are two bands, the upper band the lower band. The middle line is the moving average. The outer bands are the standard deviation of this […]

Support and Resistance — Moving Average

Moving average is a technical indicator to observe support and resistance. They are a lot similar to trendlines and channels. But they help identify the direction of the trend a lot clearer. Also, they show the  strength of the trend. By adding a combination of moving averages like 50-period, 100-period, and 200-period, we can identify a long-term trend and the strength of the trend. Moving averages in addition to other indicators like MACD and RSI provide great entries in the direction of an existing […]

Forex Trading Stochasthic Indicator Explained

The Stochastic oscillator is calculated using the high, low, and the most recent close to determine its value. The default setting for a stochastic oscillator is 14, meaning that it will take into consideration, the previous 14 bars of data, in calculating its value. This can be manipulated to make the stochastic faster or slower depending on whether the number of bars it takes into consideration is increasing or decreasing. It is worth […]

How to Use Bollinger Bands — Trading Strategy

In this video, we will discuss about Bollinger Bands. We will focus on how to trade them using trends and trend reversals. But firstly, in terms of their construction, this indicator is made up of 3 lines. The center line is a simple moving average, The distance between the center line and the outside lines are measured in terms of standard deviation. So, firstly, when we get into trends, we […]

Forex — Stochastics Indicator

Stochastics is actually a technical indicator used to measure overbought versus oversold. Now, there is another application that is really more for trend traders, that is momentum. But stochastics is actually a Greek word for random. When price go to a higher range or a lower range, get too far stretched, there is a reversion to the mean. Let's look at this chart. We have the stochastics indicator with […]

Forex Trading — Average True Range — ATR Indicator

The Average True Range or ATR is a volatility indicator. It measures the range of the session in pips and then determine the average of that range over a certain number of sessions. For example, if using a daily chart with a default setting of 14, the ATR will measure the average daily range from high to low of previous 14 days. So, take a look here as the current ATR in the daily chart shows the reading of 0.0153. That means […]

Forex Trading — Average Directional Index Indicator

The Average Directional Index or ADX is a directional movement indicator and is used to measure the strength and direction of a trend. It consists of 4 main components, the ADX line, the +DI line, the -DI line, and the level at 20. Let's take a look on how to use this in your trading. First of all, the ADX is great to determine if the pair is in a range or trending. The ADX line values below 20 suggests that the price is […]

Forex Trading — Ichimoku Kinko Hyo Indicator

Ichimoku is a momentum indicator that identifies trend direction, support and resistance, and provides trading signals. It consists of four main components, the tenkan-sen line, kijun-sen line, chikou span, and kumo cloud. As most of the similar indicators, you look for a line crossover, to find your entries. For a long entry, you are looking for the tenkan-sen line cross above the kijun-sen line. For short entry, you are looking for tenkan-sen line cross […]

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