With the advancing technology, you can find many tools and gadgets you can use to help you in the forex market. There are very many indicators you can find in the market and you may be tempted to try each and every indicator. It is not wise to jump from one indicator to another to find the perfect one for you. Here are the forex indicators you can use and how you can use them.
Some of the people use bar charts, others use line charts, but I think candlestick charts are the best to use. With a candlestick, you have the chance to get much information within a short time compared to the other form of charts.
A good example is the fact that you can see the high, low, open and close each and every time if you use candlestick charts. Other clues you need to have in order to predict the forex market like short bodies, large bodies, short wicks, and long wicks can also be seen in the candlesticks.
In order to identify where the market is heading to and to also identify the latest trends, you need to use moving averages. The forex market does not move in only one direction instead you will find that it moves up and down.
To eliminate the jumping direction, use moving averages to help your eyes follow and quickly recognize trends you can follow in order to make some profits.
Support and resistance
Unlike other forms of indicators, support and resistance don’t lag behind and help you keep a historical perspective of the market. As a result, you will be updated on how the market is doing at the moment.
Support and resistance can be defined as those prices reached in the past and which turned the market around. There must be a reason why this happened. Maybe the price was rising, reached a resistance level and fell back down. Another explanation may be that the market was declining reached a support level and went back up. All in all, there was a level whether high or low which turned the market.
The next time the market repeats this trend, there is a high possibility that the market will turn around again. In case the market surpasses these price levels, then it is an indication that the market has experienced an extreme momentum and the prices will continue moving in the direction through the price levels.
Bollinger bands are important as they tell you if the market has reached extremes. Though trend trading is great, you have to also know that all the trends eventually end. Therefore, Bollinger bands will help you avoid entering a trade that is about to end.
This is another method used to identify support and resistance in the market. In case you know when the market is going to turn around, this is your chance to make huge amounts of money. About any trading platform simplifies the Fibonacci levels to make it easy to draw within a very short time.