In the world of Trading, there are lots of indicators. Most will be useless for your kind of trading and a few will be crucial. Looking for out which ones are ideal for you is of the utmost importance, to help you with your transactions. New indicators are Coming out all of the time, with sophisticated properties that lure the newcomer into a false sense of security. Steer clear of them. The tried and trusted ones are generally the best, that’s the reason they’ve lasted! So how many indicators should you use? – Well, you have heard of ‘analysis paralysis’ – this is where you have numerous indicators that you never trade as you are waiting for the right ‘once in a lifetime’ orientation, in which they agree with your plan!
Do Not use indicators in any respect, most use about three or two and some use more. What I am trying to say here, is that you will need to locate a couple that you’re familiar with and then adhere to them. Don’t be enticed to a fancy indicator because your friend appears to get great results from it. Two or three is definitely best to be going on with. The most popular Index is the ‘Moving Average’ lineup and even in Forex, there are only a few traders who don’t use it. The problem is deciding which interval to use, since this will depend on your trading time frame. A 200 interval Moving Average or 200MA, might not be much use to you if you ‘scalp’ trade, but I use the 200 period for verifying the present trend. Together with the 50, 20 and sometimes the 10MA, these constitute the first index that I find most useful. I’ll see how far the MA lines are extended in the current cost, to assess how powerful any fad is and trade so.
Next is the dreaded MT4 インジケーター. Dreaded, because most dealers do not know how to use it! I will not even start to explain it here, just tell you what I do with this. I use it for what I believe to be an extremely important decider in if I enter a trade or not: I search for bullish and bearish divergence. When comparing it with the cost graph. I will find a turn in price management if the peaks or troughs in the MACD don’t correspond to peaks in the purchase price chart. This is imperative to my general plan, if this routine in the graphs isn’t there, I won’t put on the transaction. Similarly with the RSI Index, I will again search for the identical pattern comparison with the price chart, which essentially means that the two indicators of MACD and RSI’agree’ with each other, giving me a much better probability of any trade doing nicely. By using the Mix of Moving Averages, MACD and RSI indicators, I will get a feel for what’s going on in the currency pair and then exchange accordingly. I may compare them to a different correlating currency pair to confirm a trading decision.