One of the most confusing areas of trading Forex or any other financial product is the absolute abundance of technical analysis indicators. Most trading platforms come with dozens of indicators preinstalled. As these indicators come bundled with trading platforms like MetaTrader 4, many new traders feel compelled to study and practice using many of these indicators. Unfortunately, this impulse to explore numerous indicators can be overwhelming.
Whatsmore, many traders feel the urge to put what they know about all these technical analysis tools into practice. By enabling several indicators simultaneously, traders can confuse themselves and miss opportunities. If you wait for too many signals, you may find that the scenario has fully played out before all your indicators align. Similarly, if you have too many indicators, you may be getting mixed messages. When you use multiple forex indicators, you need to ensure they complement each other rather than conflict.
If the theory of stacking your charts with many technical analysis indicators is faulty, then how do you choose the best Forex indicators to trade with; let’s explore.
Different Types of Forex Indicators
Even though there are hundreds, if not thousands of variations of technical analysis indicators, they are usually grouped into four categories. These categories are Trend, Volatility, Volume and Oscillators.
Trend Forex Indicators
Trend indicators help traders to identify trends in the market and deviations from trends. This family of indicators doesn’t only help to confirm which direction a market is heading, but it also allows you to see if there are any anomalies, for example, if the current prices are far away from the historical trend. Moving Averages, Parabolic SAR and Accumulative Swing Index are examples of trend indicators.
Volatility Forex Indicators
Volatility indicators help traders to be alerted of volatile conditions in the market as well as changes in volatility. When volatility increases, it can be a sign that a breakout will occur and when it decreases, it can be a sign that a trend is coming to an end. One of the most popular volatility indicators is Bollinger Bands.
Volume Forex Indicators
Volume indicators help traders to detect how active a market is based on the frequency of price updates, price movements and traded volume and how those changes compare over different time periods. Some examples of Volume indicators are Volume ROC, On Balance Volume and Chaikin Money Flow.
Oscillator Forex Indicators
Oscillators help traders to recognise overbought and oversold situations. The term Oscillator doesn’t actually refer to something the indicator shows you but rather what it looks like. This group of indicators oscillates over a fixed point. Popular Oscillator Forex indicators include MACD and Relative Strength Index.
How to Find the Best Forex Indicators
Choosing the best Forex indicator is like picking the best pair of shoes. Price is a reflection of quality, but only up to a point. You can spend thousands of dollars on a pair of shoes and a forex indicator, but that doesn’t mean your purchase is the best on the market. There is much to consider when choosing technical analysis indicators for trading Forex.
Some traders will use an indicator from each of the categories listed above. Each indicator can show a vital piece of the puzzle and contribute towards a conclusion. But it’s still not that simple. Many indicators use other indicators in their equations, which means two different indicators may be based on the same underlying information.
One of the shortcuts to equipping yourself with the best Forex indicators is to buy them. Instead of going through the pain of testing dozens of indicators and hundreds of variations and combinations, you can turn the process into something much more similar to buying a pair of shoes online. Find reliable vendors, check reviews and find customer testimonials.
Buy the Best Forex Indicators from TraderAdvicer
Our best-selling Forex indicator is the MOOFAZ Indicator. It is one of the most accessible technical analysis tools to interpret and act upon. Thousands of traders depend on the SFI Indicator to sustain a profitable FX trading strategy. We are proud to say that we have received hundreds of messages and feedback from clients to thank us for assisting them to follow a sustainable trading methodology. This indicator displays simplistic read buy and sell signals, so you know when to get in and out of your trades.
For traders who are up to the challenge of following technical analysis indicators as opposed to signals, we have a great option. The TraderAdvicer SCALP STAR Forex Indicator uses a cluster of indicators which don’t just complement one another but are completely integrated. The indicator encompasses our proprietary volatility bands, automatically calculated support and resistance zones and various moving averages. All aspects of the indicator align and rely on each other to generate actionable signals. The SCALP STAR Indicator uses a combination of trend, volatility and other vital objects to deliver reliable signals on the lower timeframes for agile scalping strategies.