Forex Indicators - The Best Way to Guarantee Success in the Forex Trade

Forex or foreign exchange business has been steadily gaining popularity in the recent times as everybody is looking for alternate means of income in these financially troubled times. But to strike it rich in the forex market, you need to be aware of the rules and regulations of the game or could end up losing heavily. And the best way to guarantee success here is by making use of forex indicators.

Forex indicators are also known as technical indicators and are basically a series of data points which can be used to predict the direction of currencies. Some of the most important indicators include Stochastic oscillator, Relative strength index or RSI, Number theory, MACD, Waves, Gaps, Trends and Chart formations. Let us take a brief look at some of these and how they help in the forex business.

Among all the forex indicators, the RSI or Relative Strength Indicator are a highly sought after one as it can measure the ratio of up-moves to down-moves of a currency pair and is usually expressed as a range between 0 and 100. An RSI of 70 or greater indicates the currency is overbought and an RSI of 30 or lower is when it is oversold.

Stochastic oscillator is measured as a percentage and indicates overbought and oversold market conditions. Market experts consider divergence between the stochastic lines and price action of the commodity to indicate powerful trading signals. The MACD or Moving average convergence divergence is also a powerful indicator and involves plotting two momentum lines. What makes it one of the best forex indicators is that it can be used to indicate changes in trends and thus enable the investor to change his trade accordingly.

Learn how to use these forex indicators to get ahead in the foreign exchange market and reap in its rich rewards.