Exponential Moving Average - EMA Indicator

The exponential moving average is simply a line that is based on the average of a number of period points. Extra weight is given to the first few points, unlike the simple moving average. The SMA on the other hand has identical weighting on all points.

What is the purpose for adding weight? A quantity of traders feel that SMA's do not react speedily enough to drastic market movements. To correct this problem, the EMA's were created.

If you were to enter a 20 SMA alongside a 20 EMA, the exponential moving average will always respond to price movement quicker than the SMA would. There is a disadvantage to this. Because it responds quickly, many false changes in the trend occur.

In a ranging market, this can be very lethal. In a ranging market, virtually all Forex traders pass up the use of any indicator based on the moving averages.

A strategy that is reasonably popular with traders is the EMA crossover. A period of 5 as well as 13 EMA is typically used. The 5 EMA is the lead line, traders buy or sell if it goes above or underneath the 13 line. When the markets are in a solid trend, this strategy does fairly well. In a ranging market, heavy losses will take place.

An additional strategy involves three EMA and utilizes the cross over theory as well. Forex traders pick the EMA of 4, 9 in addition to 18. All three periods depict the short term, long term and mid term trends of a financial instrument.

If both the 9 and 4 exponential moving average lines cross over the 18 EMA, traders buy. In reverse, should both 4 and 9 cross below 18, that is an indication to sell the financial instrument.

While the Ema indicator can be very effective, it takes a skilled hand to truly reap the benefits this indicator offers to traders. While this article has been categorized under currency trading, the exponential moving average can be applied to all financial markets that include commodities and stock trading.

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Forex Trading and Fundamental Analysis

No serious discussion of forex trading would be complete without talking about the subject of fundamental analysis, and it's bearing on the markets. Forex traders should always keep their "finger on the pulse" of what is going on behind the economic scenes of the various countries whose currencies they trade.

Fundamental Analysis can best be defined as the study of the underlying economic and political factors that influence a particular currency. The goal is to attempt to predict price action and trends by looking at many different economic indicators and governmental policies.

Fundamentals for a currency may include interest rates, central bank policies, employment figures, and Gross Domestic Product numbers. These statistics are made public on a regular basis by most governments, and are watched closely by the astute foreign exchange trader.

Why bother with fundamental analysis? The simple answer is because only by looking at the fundamental factors that influence currency prices can you gain an accurate long-term view of where the prices are going.

It gives you the "raw material" as to what is driving prices, but it still does not give a trader the entry and exit points of his individual trades. It will help the trader, though, in developing a plan based on his unique trading strategies and goals.

Many of these economic reports are watched closely by traders, and can sometimes have huge short-term effects on market movement. Some astute forex traders will trade the markets at the time of these releases, hoping to make quick profits from the huge moves that often occur.

Unless you are experienced in trading, and familiar with the huge price swings during these report releases, it is best to stay out of the markets until they settle back down to their normal price movements.

The two releases in the US that tend to move the markets the most are the Employment report and the Federal Open Market Committee (FOMC) meeting minutes release.

While on the surface it might appear necessary that a trader needs an advanced degree in economics, actually a few simple guidelines are all that is needed to make sense and trading decisions based on this data.

Does the data strengthen or weaken the currency of that country? What are the long-term stated goals of that country's policy makers? Do their policies and data support more investment in that country, or make investors more wary of putting their money there?

Fundamental analysis can certainly appear to be a confusing subject and best left to professional economists. However, the retail forex trader can glean enough information from monitoring the major indicators to more accurately predict the strength or weakness of a particular currency. It is a fascinating and never ending study, to be sure!

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Best Forex Trading Indicators - For Bigger Long Term Profits With Less Risk

Here we will look at some best Forex trading indicators and how you can use them to make bigger Forex profits...

Here are some of well known indicators which every trader should make part of their Forex education. We will give you a quick overview of them and some tips, on how to use these indicators for bigger Forex profits.

Bollinger Bands

Gives you a view of the volatility of a currency and standard deviation of price. If you want to trade Forex successfully, you must understand the impact of volatility and standard deviation of price. Bollinger Bands help you see volatility at a glance and while we don't have time to cover all the advantages of Bollinger bands in this article, below you will find a trading tip which is extremely useful for entering a trend in motion.

Trading Tip

In strong trends, buying back to the mid Band (the center moving average) offers a great low risk, high reward entry point.

Moving Averages

Short term price spikes never last long and are normally driven by emotion and prices then fall back to an average which is in line with a longer term moving average. There are several moving averages which are great for spotting areas of value when trend following and here are two of the best.

Trading Tip

Notice in a strong trend, how important the 18 day MA is and how short term spikes away from the average and then returns to it. Take a look at the 40 day moving average as well, as it makes a great stop level in a strong trend.

Simple moving averages are a very effective tool and all traders should study and use them.

Average Directional Movement

Want to know if a market is trending and the strength of a trend?

The ADX line is a great indicator to help you do this.

Trading Tip

Want to know when to bank some profits and get advance warning when a trend might end? Watch for the following:

Watch for a move above 40 and a turn down, as a great profit taking warning. This set up often warns of the end of a strong trend and allows you to tighten stops or take some profit.

Relative Strength Index

The RSI measures the strength of the trend. Trading divergences of the RSI from the price trend can be a great way to warn of a trend change and get out of existing positions or get in to contrary trades.

Trading Tip

Look for changes in the RSI from chart extremes above 80 below 20, to warn of important trend changes and contrary trading opportunities.

The Stochastic

The stochastic is based on a simple concept:

If a trend is strong, the price will close, closer to the high in a bull market and vice versa in a bear market. Trading crosses on the stochastic, with bullish or bearish divergence from overbought or oversold levels, is a great way to time trading signals with greater accuracy.

Trading Tip

Watch for extreme readings in the RSI and a divergence away from the trend then, use a stochastic crossover (also from extremes) to confirm the move and execute your trading signal.

Learn how to use these best Forex trading indicators and combine them correctly and you can enjoy bigger Forex profits.

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The Proven Best Forex Indicators to Enhance Your Income

There are many forex indicators to choose from that can help you make more money in a shorter period of time than without. However, if you have no idea how to use the indicators they are useless. For the vast assortment of forex strategies and tips there are a few top used ones that are tried and true methods for figuring out the best time and trades to make. First, you need to consider the factors you are most interested in working with in order to find the ideal trading scenario to help meet your specific goals.

For finding when to trade, use the MACD (Moving Average Convergence Divergence) method and for what to trade the RSI (Relative Strength Index) or the Stochastic Oscillator are the preferred methods for seasoned traders and brokers alike. Ideally, you would be using all of these indicators together to find the ideal situation for when, where and what to trade. This offers the best situation for you as a trader and allows for you to learn how to find these tactics on your own. After you've used each of these a few times you'll find more confident in your instinct and ability to predict what you need to do when to make the strongest and most lucrative trades.

Regardless of the methods and tactics you decide to use, it's important to have a number of forex indicators in place in order to achieve your goals and learn how to use the forex market. When you are first starting out taking the time to chat with other forex traders and brokers can be a beneficial experience to learn more about forex and how to trade successfully using some of these techniques. Once you have done a few trades and taken some time to watch the forex currency market you will feel your trader's instinct kicking in more and be able to determine the best moves, trades and trends to follow for the highest profit in the best time frame. Remember to stay true to your goals, as getting greedy and concentrating on short term gains often leads to losses and devastation. Set medium to long term goals and work hard and obtain them for the greatest level of success.

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Forex Indicators With Disciplined Set of Rules For Entering and Exiting Trades

Forex indicators used with the technique described below will add to a traders confidence and remove the "should I" or "should I not" traders emotion to a varying degree.

I use a higher time frame (1 hour) to determine the trend, I then change over to a lower time frame and wait for the setup, once this is noted, I immediately select an even lower time frame to enter the trade (this is done to achieve a near precise trading entry) in the direction of the major trend.

The following describes my setup using Technical Analysis and Forex indicators, this can be observed in detail with pictorial and video format when you visit my web site redirected by a link in the resource box.

Plot:

Exponential Moving Average (EMA)

200 Simple Moving Average (MA)

20 Simple Moving Average (MA) 8

I use (EMA) 200 to keep an eye on the trend. If the trend is up, I look mostly for buy signals. If the trend is down, I look for sell signals. If market is trading in a range, you will see that (EMA) 200 stays almost horizontal.

Watch the setup. All you need to win using this system is strict discipline, you must wait for the setup to place a trade. This technique works with all time frames and across all markets if traded with strict discipline.

Buy Signal: When a candle opens and closes above both after (MA) 8 has crossed over the (MA) 20, and a Parabolic SAR is observed, It is time to buy. The stop loss can be set at the (MA) 20 level

Sell Signal: When a candle opens and closes below both after (MA) 8 has crossed over the (MA) 20, and a Parabolic SAR is observed, It is time to sell. The stop loss can be set at the (MA) 20 level

I also use the following Forex Indicators, Bollinger Bands to confirm Overbought and Oversold price levels. I also use the RSI to confirm if the price is in the bullish or bearish area before placing a trade

This is a simple, and powerful method of trading. Emotions are minimized as you place your trade and apply the method. Monitor your trade, and as always use trailing stop loss orders, never terminate a winning trade prematurely, doing this is a guaranteed way of going broke trading the markets. The golden rule is to adjust your stop loss to break even as soon as reasonably possible, however, you must give price the stage room to perform or you will be stopped out too early in the trade

Please demo trade, paper trade, back test my methods, or implement these Forex Indicators in your existing trading, make sure at first you feel satisfied and confident that this is for you... as with all types of trading, make sure you know what you are up against -- and take it from there!

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Forex Buy and Sell Indicator

While there are a few free buy and sell indicators out there, you must ask yourself how accurate are they? Of course there are e few paid options out there that are certainly considering if you are serious about changing your lifestyle. One such indicator system is the forex autopilot system. This is a unique system where a trading 'robot' that actually automates the whole process for you, thus taking out all the guess work for you. As long as you have a computer the forex robot will do the rest for you.

This buy and sell indicator system works by you setting the parameters that you want to to trade with, the robot then scans the market actively seeking trends and tells you when to buy and sell, the amount of risk from your end is minimal as you set how much you want to trade with. With the forex autopilot system you have access to a demo account that has a free forex buy and sell indicator built in, so you can see how the system all works without you having to risk any start up capital.

If you are skeptical of this system, and you are thinking are there other options out there for me? well you could attend a seminar or buy books on the subject and this is fine if you want to learn everything there is is to know about forex trading. The only problem is that learning about how forex is that not easy and take a long time to learn. The forex autopilot system can get you up and running quickly and if you are someone like me who likes have a system that runs on autopilot then have a look here [http://www.squidoo.com/forexautopilotsystemreview] to see how it all works.

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FX Indicators - 3 Steps to Setting Up an Easy Trading System

Just imagine if you had FX indicators that would help you to consistently pick winning trades. There are a couple of indicators that I have used that work very well. You need to use them in a specific way to make it work.

FX indicators are tools traders use to help them determine where price for a currency pair is heading. Using a few of them together can help pin point what's about to happen with price movement. The idea is to have a number of them line up showing that price is about to move up or down.

It can be very confusing when you first start to learn about Forex trading. There are so many different types of tools you can use that it's hard to know what you should be using. Some people get turned off from trading as it seems like there's no clear path to follow to create a simple trading system that you can rely on.

Determine the Trend First

It's important to determine which direction the currency pair is trending before you enter any trades. You do this by looking at the daily, hourly, and 15 minute charts. You want to find currency pairs that have all three charts showing the trend in the same direction. Your trades will be more consistent if you trade with the trend rather than against it.

Moving Average Indicator

MA is one of the easiest ones to use but is very helpful. Pretty much every charting package will have this as a feature you can turn on. It is a line drawn over your charts that smooths out the highs and lows.

This line makes it very easy to see how a currency pair is trending. The key points to watch are when price breaks above or below the line. If it breaks above, it's a signal to go long. If it breaks below, it's a signal to go short. Remember though, you need more than just these line breaks to enter a trade.

Stochastic Indicator

This is used to read price momentum. It measures overbought and oversold conditions. When price becomes too overbought or too oversold, it tends to reverse. This is represented by an oscillating line that's placed under your charts. This line moves between zero and one hundred. The currency pair becomes more oversold closer to zero and more overbought when it's closer to 100.

The idea here is to use both of these FX indicators together. When you see stochastics oversold and price breaks up and through the moving average line, you should go long. If you see stochastics overbought and price is breaking down and through the moving average line, you should go short.

So there you have it. A simple way to use FX indicators that will help you pin point how to enter a trade. I now use an ever better way to trade the FX market. I use software that does this type of analysis for me. It's far more consistent than doing it manually.

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Important Indicators in the Forex

Looking for perspective is the biggest challenge for traders in the forex. Since the forex is always changing and moving, achieving this required more labor from the traders. When inundated with constantly shifting market information, it is hard to separate yourself from the action and avoid personal responses to the market. The market will always change not giving in to how you are feeling.

The act of buying and selling traders share is a way of controlling the movement. Along those lines, here are some tips on avoiding common pitfalls when trading forex.

Never believe what you read in the news always make sure you are able to analyze it. Most of the time the news that gets released are just different opinions to influence the traders. With this news about the forex it will be a deciding factor for many traders on how they will invest.

Depreciation of the yen can be avoided it was said by the prime minister of Japan. What happens when the government will request traders to lessen the weakening of the currency is that more people may think that the opposite will actually happen.

People were right as the next day the dollar and the yen did in fact increase. The statement that the prime minister said was actually a good indicator. In this case most people would say they were trying to 'fade the news'.

Any updates of the currency movement will mostly be given by traders and bank analysts. Why try to alter the people when it comes to the currency? It is still important that traders do not get their hopes up when it comes to the movement of the currency. It is essential for people and traders to know that the way the news is reported about the forex is as important as the event itself.

A price surge is a signature of panic or surprise. It will harder to predict how the market will move whenever people continue to trade even if not announcement has been released. Prior to any actions, people should make sure they know the right direction of the market so that there will be no pre-surge prices.

The main goal of the people who trade in the forex is to earn money and most of the time additional indicators seem to pop up. In the same manner, most indicators are just redundant anyway which really does not do much for you when trading.

Essentially what you want to know about is the trend direction, resistance, support and buying and selling pressure. One good tool to have on hand is the point and figure chart which has been around for quite some time as a technical analysis tool. The internet does not have much on the point and figure charts but many other stand alone programs offer them.

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Forex - The Role of Trading Signals

For the purposes of this article, we're going to assume you already have a basic understanding of the Forex market and are looking for additional information to make your Forex trading as successful as possible. When to buy and sell, triggered by observing trading signals, can provide you with one of the keys to making successful Forex trades. And that's what we're going to examine today.

What exactly are trading signals?

Trading signals are indicators of Forex market trends, generally based on a trading system, that tell the trader the best time to buy or sell a currency. These trends can include everything from currency pairs near moving averages, to support and resistance levels, to Fibonacci levels. Different trading systems can require different signals and trends for their recommendations. Some systems can include as many 26 indicators in their development of trading signals.

Why are trading signals important?

The Forex market is one of the volatile markets in the world. Currency shifts can occur for a wide variety of reasons, including economic conditions, political shifts, government spending, consumer spending, even weather conditions. These influences can trigger changes in the currency, which are reflected in nearly instantaneous shifts in the market. Trading signals, based on technical analysis of market conditions, allow traders to anticipate these shifts to their advantage.

As a Forex trader, you can utilize a charting service to study the trends and track the signals for yourself. Or you can use a Forex signal service. In addition, some brokers may offer a signal service which integrates into their trading software. In either case, the services monitor and analyze the market for you. When specific signals show themselves, the service will send you a notice via your computer, by email, or even SMS on your cell phone or pager.

Most services offer signals on EUR/USD, USD/JPY, GBP/USD, USD/CHF currency pairs, but specialized services may offer other currency pairs. In addition, some services even offer auto-trading, which allows you to auto-execute their signals direct into your broker account. In such instances, you will have already established a number of options, such as lot size, in advance.

Technical signals are based on technical indicators, which are precise mathematical formulas applied to market prices within a given period of time. Traders are always on the look out for easy and clear technical signals that indicate the right time to enter or exit a particular segment of the market. This is sometimes missed by beginning traders. It's equally as important to know when to exit a trade as it is to know when to enter one. This is where limit exits, trailing stops, and fixed stops can play a vital role in your trading.

Forex trading signals are a personal decision. However, once that decision is made, you need to be committed to it (at least long enough to know if it's working for you). Most signal systems do work. Traders can learn to anticipate the market movements and conditions before making their trading decision. The problems arise when emotions are allowed to take over and the system is ignored. Don't let this happen to you.

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The Metatrader and Metatrader Indicator - The Best Trading Platform in the Forex Market

Today, there are already hundreds of trading platforms to choose from. However, many still prefer to use the Metatrader 4 along with its Metatrader indicator since it is considered as convenient, user-friendly and best of all, effective. One of the main reasons why it stands out among its competitions is because it can simultaneously work with more than 10,000, all having several accounts. This forex Metatrading program has a server that has the potential to process hundreds of financial instruments. It can even store quotes history that were dated couple of years ago.

But other than that, the forex Metatrading program and its Metatrader indicator is not just a high quality platform. It also shows the capacity of the IT industry especially with the new developments made at the trading software. Its mobile trading allows clients to conveniently trade and earn profit from the market. The security system is robust to prevent other people from accessing the trader's account. These and more are the things that make it a very competitive forex Metatrading program. With all the demands that the trading market has, the Metatrader indicator is definitely the perfect solution for all the traders out there.

If you are still hesitant to try this for your trading needs, remember that you can no longer find a trading platform that is as user-friendly as the Metatrader. There is a wide array of powerful features that can best suit all kinds of traders, whether you are novice or a pro. You can efficiently manage all your databases, groups, data feeders, financial instruments, and the like if you would use the Metatrader as your assisting software. And best of all, you can also successfully create a network which can entice potential partners without sacrificing the accuracy and the reliability at the same time.

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Catch Your Profit With The Best Forex Trading Software

Forex trading softwareis available on internet. You can get free or paid forex software from many websites, trader blogs and trader forums. Most forex trading brokers provide forex software for their clients. It is a part of their services. Some of the brokerages build their own software but some others purchase it from other company such as MetaTrader charting software.

Several years ago, forex trading could only be done via telephone and facsimile. It was the age when the access to internet was only limited for certain purpose such as military. Soon after the internet was widely used and became popular, the growth of forex market was so fast as it is also supported by the development of online trading. Thus, forex brokers and software developers had joint cooperation and there the forex software was born.

Nowadays, we can find numerous forex trading softwares. Some forex brokers have won international awards for their excellent trading applications. Those forex brokers are from Europe and USA. The appearance of these software are very nice and they are so handy. Some free trading software is good as well. The well-known and widely used is MetaTrader.

MetaTrader is developed by MetaQuotes, a Russian software company. In my experience, this is one of the best forex trading software. MetaTrader offers some advantages for its users. It appearance is good and it is a user friendly trading software. New users can easily grasp the tools on this platform. One of the famous features in Metatrader is the so called Expert Advisor (EA). EA allows its users to implement a predetermined trading strategy. This is useful for many traders to help them out when trading in forex market. Every user can make their own EA but they need to know on a program language called MetaQuotes Language (MQL).

If you have a proven and profitable trading strategy then you can build your own EA or custom indicators. Don't worry if you don't know about MQL. With the help of trader forums, you can ask some members to build the EA or custom indicators for you, and for free. They are dedicated people. They just love to help other trader fellows.

However, if you still can't find those people you can hire a freelance coder to develop specified trading software for you. When you thoroughly conduct your own research and trading strategy development, in the future you can optimize this forex trading software to help you catching every precious moment in forex market.

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How to Choose the Best Forex Signal Provider

Want to earn dollars every single day? Go for the best forex signals! Accurate forex signals can make the difference between an average performance at the forex market and incredible profits! However, there's a catch here- those signals you go for need to be accurate, and based on solid indicators. So how do you choose the best signals? We'll tell you...

#1- Watch out for Past Performance- this is the best indicator of how good they are! There are 2 things you need to watch out for here- how well the signals have performed and how consistent the performance has been. Go for providers who have a proven track record. They provide you the best opportunities to trade in the market.

#2- Who Do They Cater To? Some providers cater to beginners only, while others might be more interested in professionals. Find out who they cater to, and then make a decision about the provider.

#3-The Speed of the Signals- this is an important indicator of how good the signals are. Face it- these signals are useless if they are not on time. Since split second decisions can decide between profits and losses, your forex signals need to be on time.

#4- Back Testing Results- your provider should also be providing you back testing facilities on the signals they provide you. The rationale is simple- back testing ensures that the quality of the signals is being monitored on a consistent basis.

These are some of the simple things you need to look into before you choose the best forex signal provider for yourself. Remember, the signals you receive will have a lot of bearing on your performance in the forex market- especially if you do not spend a lot of time watching the market. Choose the best forex signal provider available- and enjoy your profits!

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Stochastic Forex Indicator

The stochastic Forex oscillator tool is a popular indicator employed by all kinds of traders in their Forex trading analysis. Momentum is the most important employ of this indicator. Traders in general make use of three types of stochastic indicators. They are made up of the slow stochastic, fast stochastic plus the full stochastic tool.

They operate very similarly. However, the most common kind utilized is the slow stochastic indicator. Stochastic indicators are based on the theory that prices normally close in the higher trading ranges when in an uptrend.

The reverse is also assumed where prices will close in the lower trading ranges in a down trending financial market. Momentum remains strong when this happens. There are two main indicator lines in the stochastic tool. These two lines are the %D in addition to the %K lines.

This is another oscillating banded indicator just like the RSI Forex indicator. A range of 0 to 100 is where the two %k in addition to %D lines range. The 80 in addition to the 20 line signify extreme trading ranges.

As mentioned earlier, this tool can also be utilized to spot oversold plus overbought conditions. Making it similar to the RSI indicator yet again. Should the indicator breach the 80 line, this is a sign that conditions are overbought. If the indicator trades below 20, the financial instrument is oversold.

Forex traders also apply the stochastic oscillator to verify if market momentum is diminishing. If the indicator is in an opposite trend than the market then momentum has weakened.

Stochastic oscillators also offer the trader the alternative to employ cross over systems. It involves a cross of the faster %K over or above the slower %D line. Should it cross above the %D line, this is an indication that it may be a good time to buy. The reverse would suggest a sell signal.

As with moving average indicators, traders should avoid using the stochastic oscillator when the markets are ranging. It is mostly applied with a variety of other Forex indicators for its true benefit to be seen.

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Why RSI, the Relative Strength Indicator, Surpasses All Other Momentum Indicators

Whether you are a seasoned trader, or a brand new trader, learning the key concepts of the RSI, Relative Strength Index, is perhaps the most important thing you can do to advance your trading career.

The concepts are simple to learn but not readily available. Instead, the mythically incorrect concepts of RSI are perpetuated on nearly every site. These are:

1. Sell when RSI reaches 70 because price is overbought.

2. Buy when RSI reaches 30 because price is oversold.

3. When price crosses 50 RSI, this can be a good entry point.

4. And divergences are good trading signals.

It is easy to provide statistical data that shows that this information is incorrect.

There are reasons however that RSI can be a great tool to add to a current trading system or to act as a standalone trading system.

Here are three of the strongest reasons however, there are many, many more.

1. Because RSI takes into consideration time, price and momentum.

2. RSI has 4 signals that create profits.

3. Understanding the location of divergences and reversals on RSI will give you deep insight into the current market condition regardless of time frame or currency pair.

Traders who focus just on price do not take momentum into consideration. Because RSI is a leading indicator it can predict with accuracy where price is going. No indicator will be right all the time however, RSI will give you telltale signs that will tell you about the strength of a trend and the possibility of trend changes. Traders who make consistent profits take into consideration the aspect of time, price and momentum and understanding RSI is crucial to that end.

The second point above is one of the most important points any trader should know. If a trader understands the 4 trading signals on RSI they will elevate their trading game to the highest levels. There are two kinds of divergences and two kinds of reversals. Knowing all four and how they interact is crucial to reading any currency trading chart.

The 4 signals are: Positive and Negative Divergences and Positive and Negative Reversals. Divergences statistically are known by most traders but reversals are not. Reversals are the most powerful of the two signals and best for entering, exiting and re-entering trending markets. Divergences are best of retracements and predicting coming reversal points.

There is strong statistical data available that shows which signals should be traded in down trends and which should be traded in up trends. Knowing the difference can be the difference between profit and loss.

The last point is by knowing the location of these divergences and reversals in context with one another one can begin to "read" the market. For example, the current EURUSD hourly chart has created in less than 72 hours of trading; 3 negative divergences and 4 positive reversals. This indicates that the market is moving up and gives the traders specific points of entry.

In addition, because of the specificity of entry, stop losses and take profits can be reliably placed making risk and reward calculations much easier.

Traders who learn the proper concepts of RSI which are not typically found on most Forex websites and in most Forex trading courses will be well on their way to understanding the markets and putting money in their pockets.

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How to Trade Forex With Woodie's CCI (This Really Works!)

When I first ran into Ken Wood (known as Woodie) and his method of trading using a CCI indicator, I though he was full of it.

I mean, some of the things he says are pretty crazy. For example he talks about he looks for patters on an indicator.

We all know that indicators lag price. So he had to be knowing about things in the price after they'd occurred. Well, it's true that the CCI lags (otherwise it would be predicting the future, and that's impossible), but it's lag isn't that great.

Furthermore, the CCI does something that really helps. It makes things easier.

I mean instead of watching the price bounce all over, you have just one line. Thing about it. For each time period (for each bar, that is), you have four prices, a high, a low, and open and a close.

With Woodie's CCI, you have just one. The value of whatever the price is there. That's it.

So it really simplifies things. Then if you carefully look at some of his patterns (e.g. the zero-line reject or the ghost or any of the others), you notice something.

All those patterns show fundamentally sound trading opportunities in the price action (due to support and resistance concepts usually).

Woodie recommends just using the CCI indicator with no price. I'm going to contradict him. Well, somewhat. Here's the deal.

You need to tune yourself into the market. You need to understand what a good ghost looks like. You can only do that by watching the price at the same time and getting a grasp of what the market is doing.

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The Best Forex Trading Strategy That Hardly Anybody Uses

The best forex trading strategy that nobody uses would have to be price action. It's strange that this is the case, when you consider it's the oldest form of technical trading. Floor traders like Jesse Livermore became legends by just trading off of the price movement of the underlying stock on the market floor.

He would mentally note the key areas of where he spotted support and resistance, and trade off of that. The amazing thing is that forex traders could be doing that today, 100+ years later. Unfortunately, most traders don't trade like this. They would much prefer to put a bunch of indicators in their charts and hope for the best.

When you trade price action, you are the indicator. There are no shortcuts in this. To some, that's a bad thing. But if you take the time to look at the history of trading, you'll notice the theme that most successful traders preach about learning price action.

If you think about it, it's the only true way to see the markets. There is no filter involved. It's just you and the market, and can you understand what it's trying to tell you?

Following price action allows you see things like the TRUE support and resistance levels, how to spot trends, and how to tell where the future price is headed. The key is to get rid of all the shortcuts that you are using. This means no indicators, forex expert advisors, or any of the other bells and whistles.

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How To Find Profitable Forex Indicators

Foreign exchange trading is a risky business. It takes careful analysis and decision-making. Among the many tools to help a trader in his analysis would be the usage of something visual, something that he can see. These tools will help in increasing the chances of having bigger returns. One such tool is Meta Trader 4. Meta Trader indicators are foreign exchange guides. All metatrader indicators can be used for formulizing trading strategies. Some examples are general purpose indicators, divergence indicators, statistical, and free indicator. Divergence is frequently considered the top indicator. Divergence is the movement of price in relation to other indicators like MACD, CCI, Stochastic, and the likes. Regular divergence could mean getting higher highs or lower lows of price but the indicators are showing otherwise.

With Metatrader 4 (MT4), security is highly prioritized. It is user friendly and provides features customized for beginner traders. There is no need to be too highly technical to learn forex trading because the tool can be easily understood. It also has a feature to update the trader with any market changes. It can also handle multiple currency inquiries at the same time, perfect for training needs especially of non-English users.

For someone new to trading, MT4 and MT5 may be just a combination of letters and numbers. In simpler terms, MT5 is the upgrade of MT4. MT or Metatrader is the platform that supports the tools needed for foreign exchange trading. MT5 is currently in beta version and promises to produce better results than MT4 indicators. You will know more about the other indicators by visiting trading sites online like Forex Indicators.

One example, aesthetic-wise, the interface is quite the same except that icons and spacing has been elaborated, to address the MT4 issue of too compacted icons and space. This, however, doesn't have much help to expert traders, especially those who do not really care about how the charts look, but what the charts indicate.

Another is that the charts are mostly the same as that of MT4. MT5 however, supports more timeframes, for example, 2-minute chart or an 8-hour chart. These options are now default options unlike in MT4 where users would need to customize the settings to achieve such charts.

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Best Forex Trading Indicators - 2 Types of Tools That Can Explode Your Trading

Trading in the foreign exchange market was once a privilege only for large banks and major currency dealers. However, through the advancements of technology more and more "normal folks" are now able to buy and sell on the market from the comfort of their home.

But without the normal education that the pros get, new traders can feel left out in the cold. This is why many traders wisely turn to Forex Trading indicators to help get a handle on profitable trading.

The fact is that these are powerful tools that can help you to organize and measure movements on currency pairs.

The Myth About Forex Trading Indicators

A lot of traders, especially beginners, are led to believe that Forex trading indicators are some sort of secret that will take them down the path to riches.

However most seasoned Forex traders will tell you that this business involves hard work, risk, discipline and the ability to follow rules and trade through tough periods during and draw downs. In other words, if you are looking for a guarantee, trading is probably not for you.

The Facts About Forex Trading Indicators

That said trading the global foreign exchange market can be a highly profitable business, especially with the high amount of leverage that most brokers will give you.

However it is critically important to learn the basics of how to uncover profitable trading opportunities with simple Forex trading indicators.

The Two Types Of Indicators

Forex indicators can be placed into two basic categories - the continuation indicators that follow trends such as moving averages, and those that analyze the velocity or momentum of price movement.

These types of indicators work simply because they define and organize the patterns into an understandable set of tools. Once you learn how to recognize and interpret these indicators, they will tell you which market force, if any, is strongest and where or when there may be a significant imbalance between the two opposing forces that will move the markets.

Moving Average Indicators

Moving averages are one of the most popular and easy to use tools available to the Forex traders looking at timing up or down trends. They help show underlying market movements and can provide additional supporting information on buy and sell decisions.

Moving averages work best when a market is trending, and are less effective when a currency pair chart moves sideways (in a trading range).

This means that you need to first identify markets that display some trending characteristics before attempting to use moving averages.

Moving averages may seem boring compared to other technical indicators, but there is more than meets the eye when it comes to this simple tool.

Moving averages can be applied to any price or data series to generate buy and sell signals for both long and short positions. And they can be used to establish support and resistance points in the markets.

Momentum Indicators

Momentum or Rate of Change oscillators involve the analysis of the rate of price change ,rather than the price level that Moving averages use. The speed of price movement and the rate at which prices are moving up or down provide clues to the amount of strength or weakness of a currency pair at a given point in time.

Momentum oscillators, such as RSI, stochastics, or MACD, are a favorite indicator of many traders and they are best applied to non-trending or sideways markets. So they are the best tool to use when a Moving Average indicator is practically useless.

This is because momentum indicators are generally a leading indicator, and will often move before price action does.

These Forex indicators are set up as an oscillator type of indicator. They help to reveal turning points and extremes when a market has been flat for some time. In physics, momentum is the tendency for an object in motion to stay in motion, and this is the principle behind the momentum indicator.

Combine For Best Results

Between these two indicators you should be able to build a solid trading tool box. Moving averages for currency pairs that are moving up or down with regular consistency, and Momentum indicators for the times when the markets move lazily sideways.

One More Consideration For Forex Trading Success

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Spot the Day Trading Indicators

Professional day traders always have a strategy, this means that they have a method that is designed to have a positive effect on a certain trade that could last as little as a couple of hours. The day trading strategy is the most popular strategy out there and it is for this reason that many forex experts provide strategies that are used for day trading in the stock market.

The great thing about the forex currency market is that it is particularly liquid, this is the reason that a great number of people can use the same strategies and day trading indicators without having a significant effect on the markets pip prices. The art of being a successful day trader is to have plenty of discipline, there are many times when you may have a loosing day but you will need to be able to look at these loosing days and not worry. This is the mindset of a successful day trader.

If you do not have a set plan of action then you will find it impossible to become a successful day trader, there are far too many other people trading on the stock market. People who trade on the stock market are attracted by the huge leverage and the many other benefits that are available to the day trader. The problem with this is due to an influx of new traders the currency prices can be pushed up and down without the use of any set strategy or system.

It is of utmost importance to know the personality of the market you have decided to trade in, I say this because each market has it's very own characteristics and day trading indicators that must be known by the trader if they are to be successful. Day trading in the stock market is no different, you need to be able to look out for the various day trading indicators and know exactly what these are.

As I have said before the secret to success day trading stocks is to have a good system or strategy and be disciplined enough to stick to it, this way you will be sure to turn a profit.

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How to Trade With Good Forex Indicators?

Although many people make profits in the forex market, it is important to know how to trade with forex indicators. Trading in the forex market requires a lot of hard work, dedication, knowledge of money management and market psychology and above all very good discipline.

There are many trading strategies and indicators used in the forex market and what works for one trader or investor may not necessarily work for another. To start trading in forex one needs to have a plan and the best forex indicator to use would be the one which is best suited to one's needs. Forex signals are broadly divided into two. They are the leading indicators and the lagging indicators. To trade in the forex market, one needs to know how to trade with these signals. It is best to have a leading and lagging indicator in the forex trading plan. While a leading indicator predicts market movement, the lagging indicator provides data about the market based on the historical information of the market.

Knowing how to trade with these signals means knowing how to use them. Forex indicators help the trader to determine the market trends. Indicators like moving averages help to determine the market trends and also the strength of the market trends. One can use forex signals to predict possible reversals in the market. This enables the trader or the investor to reduce his losses. For this, the best forex indicator to use is the oscillating indicator. Known oscillating indicators are RSI and Stochastic.

Knowing how to trade with the signals means that the trader will know how to identify entry and exit points in the market. The parabolic forex indicator will signal to the trader when to buy and sell. As fortunes are made and lost within minutes in the forex market, it is beneficial to the trader to know how to trade with forex signals.

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Forex Course Review - 10 Minute Forex Wealth Builder

Like a winning lottery ticket, forex trading symbolises the dream of spending your days doing what you love, giving up the 9 - 5 and enjoying life. Unfortunately, too many fail simply because they do not follow a simple tried and tested formula that they can scale up for bigger profits and more fx pips. This Forex Course Review of the 10 Minute Forex Wealth Builder shares the reasons why this course by Dean Saunders will help you succeed.

Do you have the time to fail?

Learning to trade forex takes time and it is a sad fact that so many would be traders think they have the dedication and commitment to make it. When success doesn't come they quit. Think of all those hours wasted in vain. For a successful start you need to very quickly test what works without committing too much time. You need to pull in some fx pips first.

It is about getting a return with as little commitment as possible to proof to yourself (and maybe your partner) that the time is well spent. Once you have something that works, something that can be duplicated and scaled up, you're on a winner. You can realistically do this with a little forex education and 10 minutes a day if you have tried and tested strategy like the 10 Minute Forex Wealth Builder.

Would you follow something that isn't tried and tested?

We are all aware of the power of the internet and the amount of information out there. So much so that after reading a few forums and websites you have an idea but no clear strategy. Finding a tried and tested forex trading strategy and sticking to it is vital. Regardless of whether it is forex trading, stock trading or playing a sport the key is to pick a method or performer and model it until you have success. Only then can you add your own flair and individuality.

Following a quick and easy, proven strategy like the 10 Minute Forex Wealth Builder you will learn the fundamentals of trading forex with indicators, and more importantly you put it to practice. Only by using the best forex indicators can you trade profitably, quickly.

Using the Best Forex Indicators

This forex course review is of one of the few strategies that openly claim to trade forex with indicators. I have spent hours learning the basics of forex moving averages, Bollinger bands, MACD and gotten no where. I know the theory but not how to put it to practise. What you need is a course that teaches you to apply and not to just 'know'.

Most indicators (eg. Forex moving averages) are lag indicators and can mean you miss out the most profitable times to open (buy) or close (sell) your trades. The 10 Minute Forex Wealth Builder looks to avoid lag indicators so that you have greater profits. You work with the best forex indicators.

Conclusion

During this Forex Course Review we have covered 3 classic scenarios where new forex traders fall down. There is the time commitment, the lack of a clear, tried and tested model to follow and not knowing how to trade forex with indicators. With time constraints it is important that only the best forex indicators and the use of a price driven entry technique. The 10 Minute Forex Wealth Builder takes you through all of this and much more, from forex charting software to help finding the right broker. It is one of the few course perfectly suited to those with little or no time and will build you a concrete foundation, not one of sand.

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What Happens When You Finally Start Trading Forex Without Indicators?

It seems like the moment a new forex trader starts off his/her trading career, the first thing they do is just blast their charts with every single indicator that their charting platform carries. I know that's what I did when I first started trading. I look back at that now, and wonder how in the world could I even tell what I was looking at? The entire chart was nothing but lines, shapes, colors, graphs, oh my!!

The day that you can trade forex without indicators is the day that you can finally say "I get it now!"

If there is one thing I have learned in my trading career, it's this: The worst thing you can have when trading is too many opinions, and that's exactly what you get when you use indicators.

You've got an MACD saying buy, you've got Stochastics saying sell, you've got moving averages saying buy, and you've got RSI saying sell. How could this not drive you completely nuts??? It's like a severe case of multiple trading disorder. In your ear, these indicators are saying "don't listen to the other one, I know which way the market is headed."

The truth is none of them know where the market is headed. These indicators are both lagging and completely random. All it is, is just a static formula that's being used irregardless of market conditions.

The real truth can be found in price action. There are no formulas involved. It's just a simple case of both seeing and understanding the market. Once you do, you can really see the power of what a simple bar chart can provide.

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Free Forex Buy And Sell Indicators Really Help Forex Traders

A forex trader may not be able to make a profit with every investment they make in the forex market. But using technical analysis of historical data, the currency pricing momentum can be predicted. Experts who understand the process of foreign exchange provides free forex buy and sell indicators for gathering and using this information effectively. Forex buy and sell indicators are created by collecting data like average price of a given time period, volatility, currency price changes, difference in price range etc. Indicators help a trader to analyze the market scientifically and make decisions so that he can earn more profit.

Free forex buy and sell indicator helps to confirm trends or support and resistance levels in the forex market. They are also useful in deciding on a trading strategy particularly when the forex market is unstable. Forex market tends to move in trends due to macroeconomic factors and international capital flows. Often more than one indicator is needed to identify the market trend. Most traders use technical analysis using indicators to get an overview of the forex market and to check whether they are buying or selling at a fair price.

A common feature of markets like stock and forex market is that the price movements repeat itself in a predictable pattern called signals. Free forex buy and sell indicators uncover current market signals by examining past market signals. Similarly price fluctuations, often called trends are not random and unpredictable. Buy and sell indicators provide data like price and volume charts and other mathematical analysis of market data to identify current trend, the strength and sustainability of that trend over a period of time. These studies help traders determine when to enter or exit a trade in the forex market.

Free forex buy and sell indicator helps a trader to organize his trading plan. It is difficult for a novice trader screen out all fundamental aspects of the market and recognizes his entry and exit points as planned due to human inefficiencies like inconsistency, fear or tiredness. These indicators help you see your trading plan objectively and impassively.

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Forex Technical Analysis Indicators

Before you make a decision to enter currency trading market you should be aware of many things connected with technical analysis and trading indicators in the Forex market. It is really impossible to trade Forex without crucial technical instruments and tactics. Forex market should be understood in complex with trading basics, fundamental and technical trading approaches. Technical analysis is the main approach to trade Forex. Having little knowledge about technical approach of the market brings you to a dead end. So dedicate your time to learning technical analysis in the Forex market. Read books and watch video lessons online to understand how the market operates.

Technical analysis comprises dissimilar technical instruments and methods for market research. Forex technical trading indicators are efficient tools in hands of a trader. Every Forex trading indicator and oscillator has its own nature, destination and coherence. These technical indicators are created to help the trader observe the market and obtain the signals for making the deals. Some traders use the combination of specific indicators to strengthen the confirmation of a signal and be certain to enter the deal. There are trend indicators, indicators for determining enter and exit points, price change indicators, volume indicators, momentum indicators, volatility indicators and so on.

Use the indicators that are appropriate for your Forex trading approach you stick to. Always search for tactics that allow you to use the right combination of indicators for the specified Forex market conditions. Besides support and resistance lines are also effective trading indicators that help you to determine the levels between extremum in the Forex trading market. Due to these levels you are able to see the zone of trading in the specified period of time. Dedicate your time and efforts to learning the Forex technical analysis and apply it practically in your trading. You can reach positive results in Forex only with the help of technical analysis.

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Do Indicators Really Work?

No matter what instrument is traded, be it stocks, futures or forex, chances are most people trading it are obsessed with finding the perfect indicator, and the perfect entry point. As a professional trader, I'll let you in on a little secret about your favorite indicator: it probably does great, 50% of the time - before factoring in commissions and slippage.

Most indicators out there, including the most popular ones like moving averages, stochastics, relative strength, etc. all work about 50% of the time. Just as good as tossing a coin. This truism probably applies to 95% of the indicators out there.

The 5% of indicators that do work are usually closely guarded secrets, not available for sale to the public anywhere. After all, if you had a golden goose, would you sell it?

Browse the Internet for a while, and you'll see fabulous indicators for sale. You can even find them on auction sites! Of course, you will only see the excellent examples of how the indicator works, not when it breaks down. Don't be fooled. They all break down under some conditions. There is no "Holy Grail" indicator.

So, let's say you buy an indicator or indicator package. Can buying it really be that bad? In a word, yes. In fact, the more money you spend, the worse it is, and not just because you spent a lot on it.

Any indicator you pay for is dangerous, because once you "invest" in an idea, you will spend a lot of time to make it work in your systems, even if that means unintentionally curve fitting or over-optimizing. Spending money on an indicator gets you emotionally involved, and that can spell trouble. Typically, you consciously or subconsciously have the need to be right in your purchase, and that will eventually hurt you.

What is the solution? Spend time studying and observing the markets, and then create your own indicator that numerically describes what you see. Or, develop a trading strategy that doesn't use any indicators at all. Chances are, with some hard work, you can find something that is better than flipping a coin.

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Trading Forex With Trend Line Indicators

Trend Lines are the most powerful technical analysis tools. They allow you to gauge the trends direction, identify potential reversal levels and enter trades with low risk and high reward. In this article, you will learn how to use trend lines indicators in FOREX trading.

Trend lines are a basically a dynamic support or resistance level. Unlike horizontal levels which are a static level, the trend line is a level that advances with time. The trendline can be either ascending trendline or descending trendline.

There are two main methods of trading trend lines.

Method 1: Bounce

The core of this trading method is that support or resistance are a psychological barrier that price does not break easily. Traders that are trading the bounce wait for price to touch a support or resistance trendline, and to begin a reversal. They then join the new trend, entering in the direction of the reversal.

This method has two main advantages: the first one is that the trading signal behind the trade is based on support and resistance and therefore is strong and reliable. The second advantage is that the trade is taken close to the level, which means that the stop loss is very tight and risk:reward is good.

Method 2: Pullback

The pullback method is slightly different, though it is also based on support and resistance. The basis of the pullback method is waiting for price to break the trend line and then retrace back. Then, traders enter trade in the direction of the breakout.

This method is more reliable than the bounce method as the trader enters trade after a breakout has been validated, and therefore has the trend on his side. However, these trades are much less frequent and therefore it is hard to base your entire trading methodology on this method alone.

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How to Use Forex MACD Indicator

The forex MACD indicator is a tool that is developed by Gerald Appel. Personally I find this indicator very useful as it has multiple features that can help to better enhance a trade and best of all, it is very reliable.

Below are what you can do with your MACD indicator

1) Identify a trend: The MACD can be used to help you identify the current trend of the market. From the position of the MACD line, you will be able to tell whether the market is currently in an uptrend or in a downtrend.

2) Identify a reversal: Besides using the MACD indicator to tell the trend, you can also make use of it to help you identify a reverse in trend. This can be done by reading the histogram of the MACD. Depending on the position of the histogram, the length of it can be use to interpret whether the buyer is stronger or seller is stronger at any particular moment. In addition, the occurrence of divergence in MACD also helps to signal an incoming reversal.

3) Confirm a breakout: There are a lot of false signal in the market and this is also the main reason why most new traders lost their money within their first few months of trading. The best way to reduce the chance of losing money due to false signal is to make use of the MACD indicator. You can used the MACD and its trigger line to validate or invalidate a trend line break or a breakout and this can save you a lot of money.

From the above, you can see what the MACD indicator can do for you. So spend sometime to play with this indicator and get use to it before integrating it into your trading plan.

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Forex Trading Software - Buy Or Sell Indicator Systems

Trading foreign currencies (the forex market) has become one of the hottest money making topics in the world, and for good reason. It is a market that offers the possibility of great returns with little start-up capital, and the opportunity for people to work from home and "be their own boss".

The novice trader must wade through a literal "sea" of information before they begin; subjects such as brokers, forex fundamentals, strategies, psychology, and money management principles, just to name a few.

A trader's choice of tools and strategies might include using trading "robots", a signal service, a managed forex account, as well as other software programs that are designed to help your trading decisions.

If you are fairly new to the forex market, or have not been making the money you had hoped, then one strategy you might want to investigate is the use of trading software that provides buy and sell signals.

These programs are not "robots" or "black box" systems. Those trade for you, with no input from you at all. A buy/sell signal software is designed to analyze the price action of the currency that you are watching, and then give you a "red light" or "green light" to tell you when to enter a trade, what direction, and when to exit. You manually enter the trade after the signal is given.

Most of the programs on the market are designed to identify when the market is trending (which the forex market does much of the time), in whatever time frame you are trading, and alert you to high probability trades.

Some programs will be completely mechanical; they will alert you when to buy, and when to sell, and you will not use any discretion at all; just follow and do!

Others will allow you to look at the signal, use other factors from your own experience and knowledge of the market, and trade the signal at your discretion. This allows you to "filter out" the lower probability signals (at least that's the goal).

In my own investigation, I have found just a few of these programs that are very useful and have a good probability of making money over time. If you are investigating these types of programs, ask a lot of questions, and make sure they allow you a certain amount of time to put the program to the test (free trial), before you commit to purchase.

If you use these programs as part of your "trader's toolbox", they will help you learn how to analyze the markets over time, and become a more independent trader. The key is, never stop educating yourself on foreign currency trading!

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Forex Buy and Sell Indicator

While there are a few free buy and sell indicators out there, you must ask yourself how accurate are they? Of course there are e few paid options out there that are certainly considering if you are serious about changing your lifestyle. One such indicator system is the forex autopilot system. This is a unique system where a trading 'robot' that actually automates the whole process for you, thus taking out all the guess work for you. As long as you have a computer the forex robot will do the rest for you.

This buy and sell indicator system works by you setting the parameters that you want to to trade with, the robot then scans the market actively seeking trends and tells you when to buy and sell, the amount of risk from your end is minimal as you set how much you want to trade with. With the forex autopilot system you have access to a demo account that has a free forex buy and sell indicator built in, so you can see how the system all works without you having to risk any start up capital.

If you are skeptical of this system, and you are thinking are there other options out there for me? well you could attend a seminar or buy books on the subject and this is fine if you want to learn everything there is is to know about forex trading. The only problem is that learning about how forex is that not easy and take a long time to learn. The forex autopilot system can get you up and running quickly and if you are someone like me who likes have a system that runs on autopilot then have a look here [http://www.squidoo.com/forexautopilotsystemreview] to see how it all works.

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Currency Trading Charts - How to Use the Main Indicators to Forecast Price Movements

Even if you're new to currency trading (or forex) then you'll certainly have come across currency trading charts. And with them invariably come a number of indicators designed to help you interpret what's been happening on the chart and, more importantly, what's most likely to happen in the future. This article will help you decide which of these indicators can help you the most and which can be ignored.

1. Simple Moving Average (SMA)

If, for example, you have a 30 period simple moving average setting then it shows you the average price over the previous 30 accounting periods. So if it is an hourly chart, i.e. where each bar, or "candlestick" represents the price movement of one hour, then the SMA shows the average price of the last 30 hours.

You can tell at a glance from this whether the price has been rising or falling over that period. This in turn shows you what the current "trend" is. If you trade following the "trend", as many successful traders do, then the SMA is your guide.

It's normal to use two SMAs, for example a 5 period and a 30 period, if you're a short term trader, or a 25 period and a 150 period, if you're a long term trader. You then watch out for the shorter period SMA crossing over the longer period SMA, which is often a signal to go long or short, as the case may be. The strongest signal is where the current price goes through both the SMAs at a steep angle.

2. Bollinger Bands

Bollinger Bands are two lines that reflect the volatility of the market, very similar to support and resistance levels. It is frequently found that when the market price touches or goes through one of the two lines that it then tends to return to the middle ground between the two. If the lines are close together it means there is a lack of activity in the market, with little buying and selling. Increased activity causes the lines to spread further apart in the direction the price is moving.

One thing to look out for is where the Bollinger Band lines are close together for a period of time. This indicates a lack of buying and selling, where traders are as yet undecided as to whether the price is too high or too low. Very often, once the price moves through one of the lines there is a strong movement in price in that direction, market activity increases and the lines accordingly move further apart. They are more of a short term indicator.

3. Stochastics

Stochastics uses the moving average principle to determine whether the market is overbought or oversold. The theory is that if the moving average lines are above 70 the market is overbought (which means you should buy) and if they are under 30 the market is oversold (so you should sell, or go short).

4. Relative Strength Index (RSI)

This is similar to stochastics in that it shows if a market is overbought or oversold. It uses the markers of 80 and 20, rather than 70 and 30, but the principle is the same. If your stochastics and RSI indicators agree on an overbought or oversold market then it's a very strong signal to buy or sell, as the case may be.

5. Parabolic Stop And Reversal (SAR)

Everyone would like to buy at the bottom of the market and sell at the top, or go short at the top and long at the bottom. In this case, Parabolic Stop And Reversal is probably the best indicator for spotting reversals in trend. It comes into its own in long term trading. The signal appears on your chart as a series of dots. When the market price crosses the dotted line going up it's a signal to buy, and vice versa.

There are other indicators, and all have their strong points and drawbacks. But your knowledge of these five will help you make a majority of correct decisions on your currency trading account, both for going into the market and coming out with a profit.

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Best Forex Indicators - Guaranteed to Increase Your Bottom Line

If you have been trading in the currency market for anytime at all then you are probably familiar with forex indicators. There are many different indicators and they often work in a complimentary manner. Some forex indicators work better than others while some work at certain times and do not work at other times. Let's take a closer look at what the best forex indicators are and how they can increase your bottom line.

Relative Strength Indicator (RSI) - This is my personal favorite of the technical indicators. This instrument works with an oscillator that tells the forex trader when the currency is overbought or oversold. When the currency is overbought it will start to head toward the high point of 100 and when the currency is oversold it will head south toward 0. One of the best ways to trade forex using this indicator is to buy or sell when the currency goes down below 20 or when it goes above 80.

50 Day Moving Average. I could have included the 200 day moving average but I feel that this one is better suited for trading forex in the short run. This is one of the best forex indicators not so much because it does anything really special but because it is used by the bigger institutions as a benchmark for buying and selling.

These are my two favorite technical indicators and there are many others that traders use as well but they are all incomplete in my opinion without a reliable forex software trading program. These indicators will help you out but you really need a consistently predictable software program to give you the trading signals. Using a trading software program with the aforementioned forex indicators will dramatically improve your trading results. You can find more information right below. Good trading ahead.

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Which Forex Currency Pairs Are the Best For Range Trading?

Have you ever noticed that one trading strategy may work absolutely beautifully with one currency pair, but it may fail miserably with another? That is because each currency pair has its own personality, special behaviors, and idiosyncrasies. And if you don't understand and pay attention to these differences, you will be leaving money on the table. So let's look at which currency pairs are the absolute best for range trading.

Every currency will range at one time or another. Especially after large moves, traders need to take a break and step away, and so the currency tends to range back and forth. But some currency pairs are absolute goldmines for trading ranges.

Let's start here - you know that interest rates are a huge factor (in fact, maybe the single most important factor) when it comes to the foreign exchange. You will get the best range trading opportunities on currency pairs where each country's interest rate is similar.

So that means that currency pairs like the EUR/CHF and the CHF/JPY are going to be good excellent range trading pairs. That is because their interest rates are very similar, so money is not flowing strongly into either currency in comparison to another. Bring up a chart of the either of these currencies and you will see that they do not move around that much.

On the other hand, currency pairs whose countries have large interest rate differentials between each other (i.e. AUD/JPY and AUD/CHF) will tend to range much less.

Some quick basics on range trading:

1) You don't have to wait for the price to actually hit the top and bottom of the range to enter a trade. Divide the range into 4 even sections, wait for the price to reach the upper or lower quartile, and then look for indications the market is turning.

2) Use Bollinger bands, the ADX indicator, or the Average True Range indicator to tell you then the market may turn.

3) Always put your stop loss outside of the range - never inside.

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The Best Forex Swing Trading Indicator

Are you looking for an indicator to give you an edge in your swing trading? Perhaps the most popular and widely used kind of indicator for swing trading, or any kind of trading, are momentum oscillator indicators. There are a wide variety of momentum oscillator indicators available, one of which is called the stochastic indicator.

Momentum indicators are leading indicator. They promise to lead price movement by offering insight into potential future price action. Momentum indicators do this by measuring momentum, or by how much the price of any instrument changes. As a currency pair or stock increases in price, momentum indicators will rise along with price movement. However, as their rise begins to slow the momentum indicator will begin to drop. This warns of the slow down or loss of momentum in the currency pair or stock.

The stochastic indicator is a momentum based indicator and offers to alert traders of when a currency pair or stock may be overbought or oversold. When an instrument is overbought or oversold, some kind of a pullback or adjustment is expected. The stochastic indicators can warn of when these overbought and oversold levels may be potentially reached, allowing traders to either tighten their stop losses to avoid giving back too much to the market or closing their trades and taking their profits before the market drops and erases any profits they had open.

Momentum indicators are widely used by hedge funds, banking institutions and many large corporate swing trading companies. One of the most popular is the stochastic indicator. When used properly, you will know in advance when markets may be reaching overbought or oversold levels, giving you time to manage your trades before it is too late.

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The Best Trend Forex Indicators

Trend line indicators in the field of forex trading are one of the basic and the most powerful tools which a trader should be familiar with in order to be effective. Belonging to the category of technical analysis tools, these indicators provide the support or resistance levels with the trend line being dynamic in nature meaning that as opposed to remaining stationary it moves with time.

While a climbing trend line is referred to as being ascending, a declining trend line is labeled as descending and in this way a trader would be able to gauge the direction of the trend, spot a reversal and decide upon suitable entry and exit points.

Prior to being used, forex trend indicators are recommended to be filtered and while this task could be performed in a DIY manner, the touch of a consultant or a financial expert is believed to make a lot of difference. Filtering trend indicators is not just essential but imperative as well because in the long list of tools, not every one of them would be as significant or contributory towards profits. Hence it is indeed worth the effort to assess the technical significance of the trend and become familiar with their behavior patterns before including it in one's trading kit.

Although not an end to themselves, trend indicators could be treated as useful means for understanding the profit-making direction. Therefore, even though one is not able to accrue a fixed monthly income, it is possible to earn benefits from probable investments and spot a worthy trade after which there are a number of ways in which one could capitalize on it. Some of the noteworthy trend indicators which are used by forex traders all over the world are MACD and TRIX and if updated regularly and handled diligently by the forex traders, these indicators prove to be useful weapons while planning a trading strategy.

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The Holy Grail of Technical Indicators

The relative strength indicator is one of the most commonly used technical analysis tools available. Unfortunately it is also one of the most misused.

The RSI was a tool developed by famed market technician Welles Wilder during the 1970's as a way to determine whether a market was overbought or oversold. The formula is rather simple with the average number of up closing days divided by the average number of down closing days. So this indicator essentially measures the size of a stock's closing gains and compares it with the size of a stock's closing losses.

According to Larry Connors over at TradingMarkets.com who back tested this indicator from 1995-2006 in over seven millions trades there is no statistically significant edge using a 14 period RSI, which is generally the default setting for this indicator. However when used on a 2 period setting he found that it becomes a very effective tool in one's technical analysis arsenal.

Using the 2 period RSI we define overbought as a reading over 90 and oversold as any reading below 10. What Connors found was that a stock with a reading of 90 underperformed the benchmark index one week later, and a stock with a reading of 10 outperformed the index by an average of .50%. Furthermore he found that as readings became more overbought or oversold the amount that a stock moved was more substantial. For example if a stock had an RSI reading of 1 or below then within a week the stock averaged a 1% gain over the benchmark index, and if a stock had a reading of 99 or more the stock averaged a loss of -.31% compared to the index.

If you'd like to find out more about technical analysis, stock and options trading then please click on the link in resource box below.

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The Best Forex Trading Strategies? Stop Using Indicators

For anybody that has been searching for the best forex strategies, I empathize for you. You have to go through a lot of garbage on the internet to figure out how to trade forex. If there is one thing that most of these strategies have in common, it's probably one thing: the reliance of lagging indicators. Lagging indicators such as moving averages and statistics. By the time these kind of indicators provide a signal, the move has already happened. Here is the best forex trading strategy I can give you: Clear out your charts. YOU be the indicator.

Just look at how the currency is moving. Price action can tell you a heck of a lot more about what the markets are doing than some RSI or MACD Indicator. All the information you need is right there.

There are certain price patterns that happen all the time. Whether it be on a 1 minute chart or a daily chart, these kind of pattern are predictive in nature. They get repeated continuously.

If you think about how most investors made their money in the early days before there was even such a thing as charting software, all they had to rely on was price action. They used the price movements as their sole indicator for opening and closing a position. Believe it or not there are still people today that don't even look at a chart when trading. They just look at the numbers move.

The best forex trading strategies in the world should have nothing to do with some magical indicator. If people in the early 1900s can trade the markets just by using price action, what's your excuse?

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FOREX Trading Tip - Use Leading indicators For Greater Profits Here's How

Many traders like to buy dips to support or sell into resistance but this simply ensures they lose.

This FOREX trading tips is all about using leading indicators to confirm a move, rather than simply assuming support and resistance will hold.

Let's look at it in more detail.

Buying Into Support and Sell Into Resistance.

You hear this tip all the time, but it doesn't make money.

It is based on the old saying "buy low sell high" which is another phrase that won't make you money.

If you buy into support or sell into resistance then the logic is that you will have low risk and high reward if the levels hold.

The important word here is "if"

If you trade FOREX then you don't want to rely on "if" and hope - you want indicators that will increase the odds of these levels holding and your chances of making a profit.

If a price is speeding toward support or resistance then it will break as often as it holds, you therefore need to watch for changes in price momentum and that's where leading indicators can help.

Getting the odds in your favor

If you want to buy support and sell resistance and get the odds in your favor do use the following FOREX tip.

You can use lagging indicators as well as trend lines in FX trading to denote areas of support and resistance and the ones we like are:

Bollinger bands and moving averages.

These indicaotrs like trend lines should NOT be used to enter trades.

When buying dips to support or into selling resistance, you want confirmation that the levels are going to hold - before prices reach these levels you want confirmation of the turn in advance.

When price momentum turns above support or below resistance you can enter with increased odds of success.

The best timing indicator by far is the stochastic.

Look it up and learn all about it as it's a great under used tool.

Another great indicator is the Relative strength Index RSI.

Combine the two and watch for confirmation on both and you have a powerful combination you can use to increase your odds of success.

They will give advance warning of a change in price momentum at support and resistance and when they turn in your favor you can enter the trade.

You don't predict with the above.

You act on confirmation and this will increase the odds dramatically in your favor and increase your overall profitability.

This FOREX tip is obvious, but it's surprising how many traders simply hope a level holds rather than looking for confirmation

Don't make the same mistake always act on confirmation when trading FOREX.

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The Very Best Forex Trading Strategies

Everyone is looking for the best forex trading strategies around. While there is no substitute for hard work and a thorough knowledge of the forex market itself, there are shortcuts to be taken to make your life a great deal easier.

Forex software is one of these shortcuts and forex trading strategies. Traders of all levels of experience find a use for it in their campaigns. This is software which was designed to typically beef up one of two essential areas of trading: efficiency and accuracy. I'll address the efficiency aspect first.

The forex market keeps very long hours, extending every hour of every day and night and going long into the weekend, as well. While this is advantageous for forex traders, it also requires that you be able to not only know what is happening in the market around the clock, but also be able to act on it quickly and efficiently. Because this can be largely impossible for anyone trying to maintain any kind of social life, forex software was developed.

Forex software also serves as an arguably superior and unquestionably more cost effective substitute for hiring a broker. It keeps track of the market around the clock, and steps in to trade on your behalf when you are not there to do so yourself, ensuring that you land on the winning side of your trades near 100% of the time. This is all without taking the large chunks of commission that a broker would take.

Moving on to accuracy, arguably the best of the forex trading strategies associated with forex software is that of the trend indicator. Trend indicators are mathematically designed algorithms which also analyze the market around the clock but run that information through their algorithms to generate remarkably accurate predictions of exactly where the market will go next.

The reason that these tips are so precise can largely be attributed to the fact that they are tested and tweaked within real campaigns within the real market for months and sometimes years in advance. As you can imagine, this information is invaluable as precise reads allow you to effectively jump in and out of the market at peaks to maximize your profit and prevent loss and risk. If you want the most precise information affecting your trades, there is no substitute for forex software, the most guaranteed of the forex trading strategies.

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Forex Trading - Why Trying To Determine Overbought And Oversold Positions Is A Dangerous Game

There are many different methods used by traders to trade the forex markets. One of which is to constantly be on the look out for overbought and oversold positions, but is this really the best way to trade?

If you have any experience at all of trading, whether it's forex trading or stock market trading, you will know that it's virtually impossible to consistently enter a position at the exact top or bottom of an instrument's trading range.

Even with the use of multiple technical indicators it is extremely difficult to do. Sure you may get lucky every so often but the reality is that most of the time you will enter a position too early and sometimes the price may just race through what you perceived to be the top or bottom.

It's important to realize that a currency pair can remain overbought or oversold for a very long time, and just because tried and tested indicators like stochastics and RSI, for example, indicate that the price is overbought or oversold does not mean that the price cannot go a lot higher into an even greater overbought or oversold position.

This is true in both short and long time frames, and can often result in a trader's stop loss being quickly hit as the price continues to become even more overbought or oversold.

For this reason my own personal preference is to follow the overall trend and not try and second guess the market, because this is what you're ultimately doing when you're trying to call tops and bottoms all the time. You're effectively going against the trend and over time this is not the most profitable way to trade in my opinion.

A more effective way of trading is to wait for confirmation of a reversal before entering a position. Yes you may not yield as many points trading this way, but it's much easier to go with a trend than fight against it.

For example as well as using traditional overbought and oversold indicators you could use crossover indicators such as MACD, TRIX and EMAs to indicate that a true reversal is taking place. You can also wait until short term support and resistance levels are breached for additional confirmation.

The main point I want to get across in this article is that if you're just using certain indicators to call the top or bottom of a market, or worse still just using your own intuition, you are playing a very dangerous game, and you are unlikely to make consistent profits in the long run.

If you do choose to trade this way you're much better off sacrificing a few points by waiting patiently for additional confirmation that a true reversal is taking place.

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Forex Indicators - Fibonacci Retracements

The Fibonacci retracement indicator is a very popular tool among Forex traders, and it is based on a set of key numbers identified in 1175 by Leonardo Fibonacci, an Italian mathematician.

What Are Fibonacci Ratios?

The Fibonacci ratio series is derived by first adding numbers as follows:

2+1 = 3

3+2 = 5

5+3 = 8

8+5 = 13

13+8 = 21

...and so on until infinity.

The next number is always calculated as the sum of the previous two numbers. However, these numbers themselves aren't important. Rather, it is the ratio between these numbers that form the Fibonacci series.

If you take the first number (i.e. 3) and divide it by the next (i.e. 5), you'll get a ratio of about 61.8%. This is the same as if you take 5 divided by 8, and so on. You'll always get a ratio close to 61.8%. 61.8% is the first Fibonacci ratio.

The next Fibonacci ratio is derived by taking the ratio of the first number and third number. For example: 3 divided by 8, 5 divided by 13, 8 divided by 21 and so on. You will roughly get 38.2% this time. This is the second important Fibonacci ratio.

The third Fibonacci ratio is calculated by taking the ratio of the first number and fourth number. For example: 3 divided by 13, 5 divided by 21 and so on. You'll get roughly 23.6%. This is the third Fibonacci ratio.

How Do I Use Fibonacci Ratios In Forex Trading?

In technical chart analysis, Fibonacci levels are usually created by taking a chart peak and trough, and dividing the vertical distance by the key Fibonacci ratios. These graphical levels on the trading chart are important support/resistance areas.

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