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.