Forex indicators can be used to help traders identify patterns, and predict the future movements of prices. They are based off historical data. They tend to be predicative, but they’re not foolproof. So, you should use them as a part of your trading strategy and not as the only way to make a transaction.
1. Relative Strength Index RSI is a useful tool to identify reversal in the market. This indicator helps you determine if a certain currency has reached a level of overboughtness or oversoldness. RSI values above 70 indicate an overbought or oversold market, while a value below 30 indicates the opposite.
2. Moving average convergence/divergence or MACD: This indicator is based on the convergence and divergence of moving averages, and it is an excellent tool for identifying reversal points in a market. It is calculated by subtracting 12-period EMAs from 26-period EMAs. It also has a signal line which shows when the MACD crosses over or below its EMA.
3. OBV: This forex indicator is based on the total volume of transactions in a particular currency pair over a certain period of time. The number increases when the volume over a specific period of times increases, and decreases when it decreases.
4. Trend Indicators: These forex indicators are based on price movement and are designed to help traders detect reversal points in the market. They can also identify areas of potential loss and gain, which can be used as a guide to determine the best time to buy or to sell a particular asset.
5. Oscillator Forex Indicators. Oscillator indicators are a useful way to monitor the performance of a market and identify reversal moments in the market. There are several types of oscillators, including RSI and MACD.
6. Reversal indicator: These forex indicators can be used to identify when assets will reverse, and present a trading opportunity. It is important to pick the right ones and make sure they are in line with your overall trading strategies.
7. Moving Average: The moving-average indicator is a powerful tool for analyzing trends in prices and predicting market reversals. It can help you to determine when the current trends will end and can also give you an idea of how strong that current trend is.
8. Volatility indicator: These forex indicators highlight any sudden changes to price behaviour that may be indicative for a change of market sentiment. They use ranges as a way to measure the movement of a currency and how volatile the market is.
9. Traders Sentiment: These indicators help traders assess the general sentiment among investors in a market and can help predict their future behaviour.
There are many types of forex indicators. Each has a different purpose and methodology. Choosing the right forex indicator for you will depend on your style and trading methods. It’s a good thing to try them all before deciding.