Forex indicators are mathematical formulas that use past price and volume data to predict future price movements. There are four main types of indicators: trend indicators help identify current market trends; oscillators predict trend changes by measuring overbought and oversold levels; volume indicators provide information about the number of price changes; and Bill Williams indicators define market structure using five dimensions and view the forex market as chaotic. Technical analysis uses these indicators to forecast price behavior.

1. Forex Indicators

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. 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. Trend indicators
Where are we going?
*“Where Do We Come From?
What Are We? Where Are We
Going?” (1897-1898, Paul
Gauguin)

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. Oscillators
History repeats itself

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. 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. Traders prefer following oscillators:
● Stochastic;
● MACD;
● Force Index;
● Bears Power;
● Bulls Power;
● Moving Average of Oscillator, etc.

10. Volumes
All things are number

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. 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. Bill Williams indicators
Genius can handle chaos

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.

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