Many Forex traders hope to seek out the perfect system and to outmaneuver the market. But unfortunately, there's no magic key you can enter into the market and suddenly become successful. However, there are many indicators a trader can use to help navigate the market more clearly, making the up’s and down’s seem to slightly smooth out. Four of the indicators that some of the most successful traders rely upon in the markets today are the following:
#1 “a Trend-Following Tool”
A similar approach to trading the Forex market is to have the tool to help you visually recognize the direction of the trend and then profit by trading along the direction is heading. The purpose is to suggest whether you should enter a long or short-term position.
#2 “a Trend Confirmation Tool”
This is useful because you want to confirm whether or not your trend following tool should be considered as reliable or not, it’s always wise to follow up with a confirmation tool. Basically, the trader is checking to see if the two tools agree on the direction of the trend. If both of your tools show a Bullish direction, the trader can feel at ease with taking a long trade position vice versa for a Bearish direction. One of the most popular confirmation tools is the MACD (moving average convergence divergence).
#3 “an Overbought/Oversold Tool”
There are many indicators that can fit this, the most common amongst traders is the RSI (relative strength index) this indicator calculates the If the increasing sum of days over a period, a value that can range from 0-100. If the price is on the upside, the indicator will approach 100, price downside approach 0.
#4 “a Profit-Taking Tool”
This is the last type of indicator every trader should have to benefit their performance because it helps determine when to make a profit on a winning trade. There are many tools that can fit in this category and one of the most popular is known as Bollinger Bands, which does some math for you and spits out some trading bands. Many traders use Bollinger Bands to time the entry of their trades, but they are sometimes more useful as a profit-taking tool. I use Bollinger Bands myself when I first heard of the indicator going through my training program at The Apiary Fund. I have found many indicators Apiary Fund reviews to be extremely helpful and using them across my trading journey has truly helped me become a better trader. Using these indicators will help minimize potential risks causing you to lose money, so it’s important to get familiar with the indicators that are available to you!