Forex indicators, their advantages and varieties
The development of computer technology has allowed players in the financial markets not only to analyze price behavior graphically, but also mathematically calculate its conversion. In other words, Forex indicators are mathematical functions based on different indicators: price, trading volume, time.
Forex indicators are used to determine the current market situation and some regularities. They help to determine the trend direction and strength, oversold and overbought zones, trend reversal, resistance zones and support levels.
They help both beginners and professionals. Each indicator is based on an algorithm that allows calculating all price fluctuations.
It allows a trader to enter trades with minimum risk, and in case of negative changes, exit them. Of course, it cannot guarantee absolute success on the market, but it provides better and safer trading.
Forex indicators are very convenient for traders. Their main purpose is to indicate the location of the price in the market and current price movement, they can also forecast future price changes and inform about price entry/exit into certain price areas. The most important advantage of indicators is that traders do not need to make calculations manually.
Traders should pay attention to price fixing. On stock and commodity exchanges, trading starts early in the morning and ends at the end of the day. Open, Low, High, Close are the basic prices when calculating the indicators.
Of course, without knowing the principles of the indicator, it is very difficult to understand it.
Today, we know many Forex indicators, but generally speaking, they are divided into several types: trend indicators, oscillators and market volume indicators.
Trend indicators are subdivided into 3 types: uptrend indicators - containing upward price movements; Downward trends - containing downward price movements; sideways - occurring when both the seller and the buyer do not have an edge. In this case the price moves in the sideways corridor.
Oscillator is a type of indicators characterizing an overbought or oversold condition of the market. Oscillators, unlike trend indicators, work well in corrections, reflecting the phases of the market, as well as bursts of volatility.
The volume indicators track the price fluctuations in a given period of time, allowing you to calculate the best time to enter the market.