Forex Indicators

Computer technologies «settled» profoundly in the analytical field of the traders. Technical analysis supporters successfully use the achievements of new technologies in the development of various trading strategies. So called “Indicators” — programs that use mathematical modeling methods to determine the likely to take place changes in the pricing of the financial assets provide significant help in finding optimal solutions in financial markets trading.

Indicators classification

The use of indicators has become so popular among traders that the market is abundant with them, constantly updated and modified. To build an individual strategy professionally, one must understand the purpose of automatic assistants. Indicators constitute three groups according to the purpose and set of functional capabilities they provide:

1. indicators that determine the dominant market trend — called trendy. They help to predict the trend vector direction, its end and turn points. The main drawback of such indicators is that information is issued with some delay;
2. if the trend indicator turns out to be «powerless», a second group of assistants is used — oscillators. This kind of indicators does not suffer from «delays» and can give some good advice in case of sharp price fluctuations in a narrow channel.
3. market participants’ mood helps to determine psychological indicators. The human factor can «replay» any technical forecasts, so the developers of modern programs started paying special attention to such indicators.

A good quality trading strategy involves the use of indicator combinations that will minimize the erroneous analytical forecasts conclusions.

The best Forex indicators

Forex indicators start to bring profit as soon as you can find the best combination of their use. A common mistake of novice traders is the «overload» of charts with a large number of indicators, which makes it difficult to perceive the overall picture and, as a result, confuses the analysis with opposite signals. Another misconception is to use only paid indicators. Of course, there are some useful ones among them but it is worth learning to use proven tools first like MetaTrader 4 and 5 terminals that can provide you with all the kit necessary by default.

Free Forex Indicators

MACD trend indicator. The indicator itself as a pulse class that follows the trend. The MACD shows the convergence of the moving average and helps to determine the entry and exit points.

The balance volume indicator OBV. Traders use it to estimate the change in volume to a price for a certain period. It is applicable in trading bonds and securities.

Zig Zag indicator helps to understand the wave tracks. A trader can determine the peak values of prices and places of significant corrections using this tool.

Bollinger Bands. Forex trend indicator that determines not only the direction of movement, but also the speed of its change.

Stochastic. It refers to a group of oscillators. Determines the percentage of the last closing price and the maximums during the time under observation.

Forex level indicators

One of the most popular strategies is channel trading, where the correct definition of pricing levels — support and resistance is of paramount importance. There is a large group of indicators that help to build such levels in an automatic mode.

ACD. Indicator for building a price channel for any type of trend. The strength of the trend is expressed in the magnitude of the slope of the channel — the greater this angle, the stronger the current trend.

Weekly Pivot. Pivot levels family indicator. Estimated data is taken on the results of the previous day. It is a good indicator for determining the entry points to the market.

Fibonacci Indicators. These kind of indicators are part of the classic technical analysis. The main advantage of this group’s indicators is that it is possible to build a full-fledged trading strategy without resorting to the help of other indicators on their basis alone.

Forex indicators without redrawing

The vast majority of Forex indicators suffer from a common «ailment» — they are redrawn, distorting signals for the opening and closing of the deal.

The exception is the group of indicators allow traders to determine market trends more effectively by getting rid of the “chronic disease”. An indicator that is not redrawn (INP) gives a timely, not a delayed signal (it is important to understand that 100% accurate Forex indicators exist only in advertising brochures, so false signals can also be found here). To verify the proposed INP on the truth, it is advisable to test it with the help of any adviser. A strategy tester begins to work with the visualization mode turned on as soon as the indicator and the Expert Advisor on the graph are all set. Testing the advisor, you will see what signals the indicator gives.

Maksvel indicator. Gives a signal to buy or sell based on the analysis of color lines. Price breaks the blue line — buy, white — sell.

MVBT indicator. It is a modified oscillator. Signals for input and output are determined by the ratio of the indicator to the zero mark: higher — purchase, lower — sale.

Indicator Rosh. Helps determine the strength and direction of the trend. When the price is within the range indicated by the indicator lines, a flat movement is observed. Breakdown in any direction indicates the beginning of the trend.

Indicator strategies are particularly loved by novice traders. Simplicity and convenience of automatic systems replaces complex analytical studies, which takes years of painstaking work to master.