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What is the Best Technical Indicator in Forex

Published on 17 March 2021 Forex Deposit Bonus, Forex Recent Information

Forex technical indicators are an important part of Forex trading. Every trader, especially the fundamental and technical analyst, needs to know the most popular indicators' uses and structure. In this blog, we will explore all details about some best technical indicators that you should follow.

Let's look at some top indicators that you and every trader should know.

 

Moving Averages Indicator

It is one of the best technical indicators and very important that you should know. The governmental banks and multiple authorities lead the volatile market, so understanding the indicator is important to guess what is happening at the micro-level.

It shows the average price of the overall sentiment candle's last number of the price. There are four fundamental types of moving averages that we use:

  1. Simple moving averages
  2. Exponential moving averages
  3. Weighted moving averages
  4. Smoothed moving averages

 

The Relative Strength Index

The relative strength index, also known as RSI, moves from a lower value as 0 to an upper value of 100. The first time it was used by J. Welles Wilder in 1978. When the indicators move over or equal 70 levels, it is considered market overbought, and below level 30 is considered market oversold.

 

Bollinger Bands Indicator

In the 1980s, John Bollinger has invented this indicator. The primarycomponentof Bollinger bands is moving averages.

This indicator deviation in two ways, one is the upside, and another one is a downside—also, the middle of the graph is considered a classical moving average.

 

Stochastic Oscillator

 In the 1950s, George C. Lane was invented the Stochastic Oscillator

Indicator. It is one of the popular momentum indicators—the indicator's main goal to find the oversold and overbought market zone.

It's derived by the following formula: %K = ((Closing Price - Range Low) / (Range High - Range Low)) * 100.

This indicator also moves from lower 0 levels to upper 100 levels.

 

Ichimoku Kinko Hyo

 The Ichimoku Kinko Hyo indicator is also known as the Ichimoku cloud. The indicator used to create a complete trading strategy, identify the resistance, trend direction, support, and momentum for an asset.

The Ichimoku Kinko Hyo indicator has five different components.

If the price trend is gown below is considered as bearish and bullish for the above direction.

Forex traders often use multiple indicators, and it depends on how you will use them.

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