Posts Tagged ‘indicator’

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Know About RSI Indicator

The RSI is a technical indicator, which is extremely popular among forex trader. It is a momentum indicator that compares the magnitude of recent gains to recent losses. It is used to determine overbought and oversold conditions in the market. The RSI indicator shows a scale of 0 to 100. Above 70 is considered overbought. Below 30 is considered oversold. You can use this indicator in conjunction with the moving average […]

Know About SMA

A simple moving average is a technical indicator, which is extremely popular among forex traders. It is used to determine an existing trend of a financial asset. For example, when the 50-period SMA is above the 200-period SMA, then it is considered as an uptrend. The moving average is also used for determining support and resistance. You can wait for the price to touch the moving average for support and take a long position in the direction of an uptrend. […]

How to Use Bollinger Bands Indicator

The Bollinger Bands is a technical indicator developed by John Bollinger. It consists of a moving average with an upper band and a lower band. The volatility is represented by the standard deviation. The bands expand when there is an increase in the volatility in the market and shrinks when the volatility is low. This indicator is used to determine the strength of the trend and to gauge the volatility in the market. After you have identified an existing trend, you can use a momentum […]

Using MACD to Trade

The MACD is a technical indicator used to identify the direction and magnitude of short-term momentum in price movements. The magnitude is represented by the histogram with the height of the bars represent the strength of the price movement. Slowing upside momentum may mean that a trader should prepare to sell. Slowing downside momentum indicates that you can buy. You can also use the MACD indicator signal crossovers for entries. A bullish signal crossover is a signal […]

How to Read ATR in Forex — Average True Range Indicator Explained

The ATR indicator is used by traders to measure the volatility of the market by measuring the price range using a set of candlesticks. It is used for setting stop-loss and to set take-profit level. It is a very good indicator for day trading to measure overbought and oversold conditions. It helps you to measure volatility, but does not give you the direction of the market. You can use this indicator to scalp on smaller timeframes. On the daily chart, […]

How to Use the ADX Indicator in Forex | ADX Indicator Formula

The Average Directional Movement Index is an indicator used to measure the strength of an existing trend. You can see this indicator as a simple line moving up and down to show the strength of the trend. However, this indicator does not give you the direction of the trend. The default setting for this indicator is 14. It also consists of two lines, +DI line, and the -DI line. When the ADX line is below 25, it […]

Four Types of Indicators Forex Traders Must Know

It is important that you should time your entry in forex trading to be profitable. Randomly taking trades is gambling. Hence, you should know how to use technical indicators for your advantage. They help you to identify high probable low risk entries in the forex market to give you the best risk to reward ratio. There are four types of indicators that you must be aware […]

Is There a Profitable Technical Indicator?

It is highly unlikely that you will come across a technical indicator which can always generate profits in the forex market. The idea behind using these indicators is to find high probable low risk entries in forex trading. Such an indicator would only be a top secret and not for sale by any company. So, you need to focus on the fundamentals before applying your technical analysis on the charts. With […]

Catching the End of the Trend with the Andrews Pitchfork

This video looks at an interesting scenario of how the market gives interesting clues signaling a reversal is about to happen. You can use the Andrews pitchfork indicator to catch such a reversal. For example, look at this chart. As you can see, the market is in an uptrend making higher lows, and higher highs. The first retracement takes more time to happen compared to the second retracement, which takes much faster. Buyers make one […]

How to Use Average Daily Range for Entries & Exits?

The ADR indicator is used to find potential support and resistance zones, which can be used for finding high probable entry and exit points. Besides using support and resistance zones, you can also use swing points, psychological price levels, For example, look at the NZD/CAD pair. This indicator tracks the average daily range of a currency pair. It is based on a predefined look back period. So, you can […]