Trend indicators are the instruments of technical analysis which allow a trader to get the necessary information about a possible price change beforehand, and he can make decisions about opening or closing the deals accordingly, and the decision will be directed at getting maximal profits and minimal losses.
The trend indicators of Forex facilitate the work of players of currency exchange, because with their help traders can plan their actions and develop strategies that will bring great profits. The trend indicators of Forex are aimed at determining price fluctuations in the past and in the present, but they can’t predict the future with 100 % certainty. Based on the data obtained a trader makes assumptions about the price fluctuations, remembering about the fact that the currency value directs the indicator and not vice versa.
Thus trend indicators help determine the trend, no matter what period is of interest for the player. Now you know what indicators of technical analysis are, that’s why we can pass to a more detailed examination of the most popular kinds.
Forex trend indicators: the main types
Forex trend indicators include:
- SMA – is the most important and popular indicator among traders. This indicator of trend lines has one important advantage – it can be easily used even by a beginner. But it has several drawbacks which can lower its exactness: flat often shows fake signals which lower its exactness significantly, also it is often late in case of standard actions on foreign exchange market.
- MACD – this indicator allows using one or several exponential gliding, which allow making more precise predictions of the direction of the trend. But like the previous indicator it can lag and often it doesn’t work in flat.
- ADX – is the indicator demonstrating a correct information provided a strong trend, but as the previously mentioned trend indicators it doesn’t give out the information in flat in case of trend deployment.
The best trend indicator is different from trader to trader and it is found in the course of work, but nevertheless the professionals advise combining them to the maximum, because only in that case it will be possible to get the most objective data. By choosing a complex approach you increase your chances of obtaining more profits and proceed to a professional level.Social button for Joomla