Most of you will already know that Forex trading is more than just profitable thanks to the simplicity and plenty of options. Many people have made millions by the option for forex trading as their profession. One reason that makes it different and more appealing than any other form of trading is forex indicators. Yes, there are a lot of them, but we managed to discover a few that truly count. Here are some indicators that you should use.
SMA (Simple Moving Average)
SMA is one of the most popular forex trading indicators at the moment. It is also the simplest of them all. SMA refers to the average price after a specific period of time. The time frame can be short (10-20 days) or long (50-100 days). Longer SMA is more desirable simply because it is more accurate and more precise. Shorter one is easier but less accurate.
The sole purpose of SMA is to help traders smooth the price after a trend begins. As a trader, you are free to experiment with different time frames and to see which one suits you the best.
EMA (Exponential Moving Average)
EMA stands for Exponential Moving Average and it is similar to the SMA. However, here we can see that but refers to the recent price average. Also, there are two time frame possibilities. The first one is a long term that will last for 50 or 200 days. The shorter time frame lasts 12 or 26 days.
EMA is highly popular and probably one of the best forex trading indicators of all times. It is especially desirable for the beginners that to the overall simplicity and effectiveness.
MACD Moving Average Convergence/Divergence
MACD or if you prefer Moving Average Convergence/Divergence is more complex forex trading indicator and it is based on complex calculations. The main advantage is the ability to assist you to identify the trend. But, at the same time, it will assist traders by measuring the strength. Keep in mind that this indicator is closely related to the EMA (Exponential Moving Average).
In order to acquire correct Moving Average Convergence/Divergence, a process in which 26 days are subtracted from 12-day time frame (see EMA section) and you get the correct value. Moving Average Convergence/Divergence is considered to be one of the most important indicators of this kind and the most profitable when used properly. Of course, we have mentioned that it is one of more complicated on our list.
The final word
All forex trading indicators come with their advantages and drawbacks, but they are something that makes a massive difference and can assist you in trading and making a profit. We recommend you to start slow and gradually increase the complexity of the indicators as you advance. If you start with the most demanding one, you won’t be able to reach the impressive goal. Take your time and don’t forget about the new forex trading indicators. They can be the answer you have been looking for so long.