Top 3 Forex Trading Indicators

Forex Trading Indicators, at first, the first thing that needs to be noted is that there is a certain amount of personal bias in trying to identify the "best" Forex indicators. More than anything else, this is done from an experience perspective, and it should be noted that trading is a very personal thing.

However, I am ready to share what I have found to be the best forex indicators for day trading, including what I would consider being the best intraday forex indicator that does not repaint itself.

Top 3 Forex Trading Indicators

Exponential moving average

I know this sounds a little outdated, but one of the most effective indicators is the humble moving average. After all, an exponential moving average is something that a lot of other traders follow.

So it gives a certain amount of credibility to its use due to the fact that many other people will watch it. However, it goes a bit further because it also gives you an idea of ​​what the trend might be for the time frame it is trading.

For example, you can use an exponential moving average to determine the longer-term trend, but you can also wait until your preferred exponential moving average matches the longer-term trend.

Relative strength index

The Relative Strength Index is an indicator that measures exactly what it says it does, Relative Strength. Essentially, it takes the momentum that technical analysis practitioners use to gauge the recent price change in a currency pair to determine whether the market is to be considered overbought or oversold.

It is an oscillator that displays itself at the bottom of the chart, with reading between 0 to 100. It has been around for nearly fifty years, and many traders are using it on different timeframes.

The basic idea behind this indicator is that trends tend to exaggerate a little bit at times, and thus you should see an occasional reversal when things are really getting out of hand. There is what is known as the "lookback period", and it is usually 14 candles. You can change them, of course, but the standard is that specific number.

The high/low of the previous day

Although not talking about a strict 'indicator', knowing where you compare to the major highs and lows of recent trading sessions makes a huge difference in how things work and are part of technical analysis.

A professional day trader tends to monitor various important levels, such as the high or low of the previous day, because in itself it indicates that the momentum will rise if this level is crossed. If you think about it, simplicity was a genius with using this strategy.

If there was a certain level that caused resistance yesterday, but we are now trading above it, then this indicates that the momentum continues to the upside and vice versa of course.

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