Forex Trading With Indicators

Forex Trading With Indicators

Forex Trading With Indicators

The use of technical indicators, it is very subjective, there is a method defined prior, a suitable period of time or a specific setting that always works, the market is always changing, although there are situations that occur frequently, Sometimes an increase or decrease daily volume, alter the predictive capabilities and the information capacity of an indicator, but with experience, traders will learn to observe the market and adapt the analysis to the specific market. In this article we point out the general guidelines to consider when using an indicator or indicators.

The first is to determine the phase of the market, if we have a flat market, or in lateral trend since the second phase of the market we have to use different indicators, we can not use Bollinger bands in a market side or oscillator in a market trend .

In addition, we must define the time period of analysis, which can vary from one second to one month, also suggest to compare and analyze a pair of currencies, different time periods, in order to find a similar trend or a difference in different time periods

Finally, we must study the particular currency pair in order to understand what elements of fundamental analysis that can affect you and what time they are released news that may affect the currency pair, for example for the U.S. dollar to 14.30 and 16:00 Italian time we have the most important daily news.

There are several indicators, with more or less similar characteristics, but with experience you choose the most suitable for that particular time, also with the study of movements of the past if they can even build new ones if we want to adapt to particular needs. Remember that there is a good indicator that works magic for good, indeed, they must always be adapted to changing market conditions and, finally, we must add that there is not a good indicator for each market.

It is often necessary to use multiple indicators for confirmation and to better analyze the market, so use only one indicator at a time when analyzing a market movement is little indication, you must use multiple indicators that complement each other without exaggeration.

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