What are Trading indicators?
The trading indicators are actually tools for analysing technical aspects while trading either CFD or Forex on exness, stocks, commodities or many more. They are usually mathematical calculations which are very complex. The price charts can be well understood with the help of the indicators. The indicators help us to understand the trading scenario and help take better decisions. Few of the indicators are RSI, Moving averages, MACD, Bollinger Bands and the Stochastic oscillator.
Most of the forex trading platforms will help you get some technical analysis but you are able to actually find a greater range of indicators if you actually get a copy of MetaTrader 4 or 5. This can be actually obtained from some brokers and will help you get enormous features. You have the capability of changing the codes to optimize the indicator according to your choices. The best currency trading indicator helps you to get clear signals and suits the interest of most types of traders. For finding the best currency trading indicator we need to know them first.
Top Forex indicators
There are various types of moving averages which helps us to get the direction of movement of the market and its trends. You can also get signals when the short term crosses the long term moving averages. There are 4 different moving averages which are fundamentally used for technical analysis like: Simple moving averages, Weighted Moving averages, Exponential Moving averages, Smoothed moving averages. This averaging can be applied to the market on high , low, open and closing rates of exchanges. You can actually get the simple moving average by geting the average of the exchange rates over a period of time.
RSI or the Relative Strength Index is one of the most popular indicators and used by most of the traders. Computing RSI is easy. You just need to compare the amount of the most recent exchange rate increase to the exchange rate drop of the currency pairs. They have an adjustable time period mostly of 14 days. It is considered a bounded oscillator which fluctuates within 0 to 100.
It was created back in 1980 in order to adapt to the marketing scenario. It actually involves drawing 2 standard deviation lines around a period of 20 days of simple moving averages. Standard deviations predict the volatility of the market and helps to give a knowledge about the present market risk. If the currency pair trades above the upper line of the indicator then it is likely for you to sell the pair and buy it if it moves below the lower line.
It helps to identify the extremities of the market and has a range between 0 and 100. There are full, fast and slow varieties of the stochastic oscillator and they have %K line based on the close relative of the market to the range of high to low from a certain time frame. %D line is computed as the moving average of that corresponding %K line. The distribution and accumulation of the market is also figured out from this indicator.
MACD or Moving Average Convergance Divergance is another graphical indicator. It is a histogram which is unbounded. The scale used by it is similar to one used by exchange rate charts. The difference between any two Exponentially Weighted Moving averages is the basis of MACD. It is fast between the range of 1 to 12 and slower between the range of 1 to 26 periods.
Understanding the following Forex indicators you are now able to find out the currency trading indicators with the following techniques. Get to understand the currency trading scenario more and be an expert in this field by understanding the ways of computing the indicators. With the help of the indicators you can very well understand the market scenario. So, learn and start investing today.