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The Most Popular Forex Trading Indicators


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Presentation about the most popular Forex trading indicators, made by JustForex.

Published in: Economy & Finance
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The Most Popular Forex Trading Indicators

  1. 1. Forex Indicators
  2. 2. What is Forex Indicators? Forex indicators are mathematical formulas that predict the future price movement. The initial data of these formulas are past prices and volumes. Market indicators are a technical analysis in action, i.e. an intelligent algorithm collects data about past behavior of price and trading volumes, analyzes them and provides a forecast for the future. The results of indicator calculations are displayed graphically and imposed upon the graphs of currency pairs in the trading platform so a trader can apply them. Technical analysis is a forecasting of price movement based on data on its behavior in the past.
  3. 3. Types of Forex indicators There are a lot of indicators. Theoretically, every trader can create his own indicators. You can earn on the sale of indicators, so the network is full of paid offerings. The MT4 Forex indicators can be used free of charge. These are the basic indicators that are perfectly proven. There are 4 types of key indicators in MetaTrader 4. 01 02 03 04 Trend indicators Oscillators Volumes indicators or Volumes Bill Williams indicators
  4. 4. Trend indicators Where are we going? *“Where Do We Come From? What Are We? Where Are We Going?” (1897-1898, Paul Gauguin)
  5. 5. Trend indicators Trend indicators help to understand what a trend dominates in a particular time interval. Trend indicators add to the price graph a line, which indicates a continuation of the trend or its change simultaneously with the price movement. The trend is a direction of the price movement on the Forex market in a certain period of time. There are up, down, sideways (flat) trends. Trend indicators negate false market signals and show the trend clearly. Most often, traders use such indicators: ● Average Directional Movement Index; ● Bollinger Bands; ● Envelopes; ● Moving Average; ● Parabolic SAR, etc.
  6. 6. Oscillators History repeats itself
  7. 7. Oscillators “History repeats itself, first as tragedy, second as farce” (Georg Wilhelm Friedrich Hegel). The term “oscillator” is derived from the Latin word oscillo, i.e. “to sway”. The market situation is constantly changing, the price is increasing, then it is falling – swaying. Unlike trend indicators, which follow the price, oscillators are ahead of it. They are trying to predict the future trend of the price movement based on speed and magnitude of price swings in the past. The idea that everything repeats. Oscillators are indicators that show the levels of overbought and oversold market and predict the future direction of prices.
  8. 8. The oscillator by itself looks like a curved line, which is located in the bottom of the price graph. It keeps moving between defined levels: maximum and minimum. The maximum level means that the market is overbought. The minimum level – it is oversold. When the oscillator curve is close to one of these levels, the signal goes to buy or sell. An overbought market is a situation that occurs after prices rose too high and fast, and the prices reduction is expected soon. An oversold market is a situation where prices dropped too low and fast; the growth is expected.
  9. 9. Traders prefer following oscillators: ● Stochastic; ● MACD; ● Force Index; ● Bears Power; ● Bulls Power; ● Moving Average of Oscillator, etc.
  10. 10. Volumes All things are number
  11. 11. Volumes indicators or Volumes “All things are number” (Pythagoras of Samos). To get information about the Forex market is difficult since it does not have a specific location. But the MetaTrader4 terminal has a tick volumes indicator in it. Tick is a one-time price movement in one direction or another. The volumes indicator shows a trader a number of ticks in a given period of time. This is not the real volume of trading on the market, it is only the number of price changes.
  12. 12. Volumes indicator is displayed in columns. The higher the column, the greater the price change. Tick changes give an approximate idea of the real volumes. It is necessary to know when the trend reverses. So, if the tick volumes have greatly increased, it is likely that soon the price will move in the opposite direction. Types of volumes indicators: ● Accumulation/Distribution; ● Money Flow Index; ● On Balance Volume; ● Volumes.
  13. 13. Bill Williams indicators Genius can handle chaos
  14. 14. Volumes indicators or Volumes Bill Williams Indicators are author indicators that define the structure of the market in five dimensions. It is one of the most controversial types of indicators. Bill Williams, a brilliant trader and developer of a separate indicators class, consider Forex to be a chaotic system. He argues that the standard prediction methods in technical analysis are meaningless. The financial market is total chaos for him, which is run by some drivers. Williams indicators are defined by these forces: ● Alligator; ● Gator Oscillator; ● Fractals; ● Awesome Oscillator; ● Acceleration Oscillator.
  15. 15. Thank you for watching the presentation!