There are many useful tools you can use to improve your chances on the market. In the following paragraphs, we will be talking about forex chart indicators as a way to help you reach a bigger profit. These indicators are pretty simple to interpret, but can be of a great help when it comes to market analysis. Stay with us and you will grow as a trader.
Forex Chart Indicators | Bollinger Bands
The first of the forex chart indicators to be presented in this article are called Bollinger bands. They are named after their developer John Bollinger, and they help us to measure the market’s volatility. There are two basic market conditions that we’re going to call calm and active. When the price is calm, the bands are close together, whereas when it’s active, the bands expand and spread apart. The important thing to remember about this type of forex chart indicators is that the price has a tendency to return to the middle of the bands. That can give you some clue about the future price movements. But we’re just getting started, so read on!
Forex Chart Indicators | MACD Indicator
MACD (Moving Average Convergence Divergence) forex chart indicators are mostly used for recognizing moving averages that can indicate a new trend (it can be either bullish or bearish). There are three important elements of these indicators. First, we have the number of periods used to calculate the faster moving average. Next, we have the number of periods that tells us about the slower moving average. Finally there’s the third number: the number of bars that we use to calculate the difference between the two. When a new trend begins to form, the fast line will be the first to react, probably crossing the slower line. When the fast line begins to diverge, you will know that the trend is fully formed! Once that happens, you will have a much clearer picture of how to proceed.
Forex Chart Indicators | Parabolic SAR
It’s very important to recognize the beginning of a trend, but it’s also important to know when they will come to an end. That’s why learning to deal with the Parabolic SAR (Stop and Reversal) forex chart indicators might be a good idea. This rather simple type of indicator has points that tell us about the potential changes in the movement of a price. When the points are below the candles, you should buy, and if they are above it, you should sell. Simple as that! We should also mention that, since this indicator assumes that the price is moving, you should use it primarily with the markets that are trending.
Forex Chart Indicators | Conclusion
Forex chart indicators are simple, yet very helpful tools that can help you a lot in your analysis of the market. You won’t have to put too much effort into handling these charts: it doesn’t take you too much time, but you will definitely get some very useful information. There are forex chart indicators that can tell us about new trends (MACD), about the end of a trend (Parabolic) and the ones that we use to measure volatility (Bollinger). Each of them can be useful in various situations, so you should definitely learn how to interpret them! But don’t stop here – browse around our website some more because we have more education materials for you!