There are several indicators or charts used in Forex market now. They differ in the methodology but they all have the same purpose and goal: To help traders predict what will happen due to fluctuating rates. This way they know when to enter and when to exit a trading position. The Best Forex indicators are the charts. That’s not all you need to watch, but it’s where you watch to decide where to enter and exit trades. And that’s the most important thing.
Forex markets are for the big banks and governments. You can trade too – However, like a mini-bike and a transfer truck, you might want to stay out of their way when they are getting into the market each day. Therefore, a novice trader or an expert needs to learn these indicators and be sure that you know how to apply them. The two most commonly used and best Forex indicators are candlestick method and Fibonacci Method.
Especially when money is involved, one should always play safe to protect against heavy losses.
The Candlestick chart was created by the Japanese over 200 years ago by a guy named Munehisa Homma. He made a lot of money from his rice exchanges. He simply used his past prices to forecast future price movements. The same concept works for Forex.
The candlestick chart is the most widely used technical indicator. It shows price for a specified period. Usually, in stock markets this could be in daily charts, while for currency markets, it could be a 1 hour, 4 hour or 8 hour chart, depending on what you want to predict. However, using it anything less than an hour is not advisable for it does not give you a reliable measure for currency markets. This mainly displays the open, high, low and close (OHLC) for the period you choose. If the chart has colors, green is for up, and red is for down. I love candlesticks. I think they are the best of the best Forex indicators, and I use them every day.
It’s commonly recommended that you use candlesticks along with other indicators. Candlestick charts can be easy enough to read once you get a feel for them.
Leonardo Pisano Bogollo also known as Leonardo Fibonacci or simply Fibonacci was the most talented mathematician during Middle Ages. He formulated the Fibonacci numbers which appears like 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, –. Each subsequent number is the sum of the previous two. For example, the number that comes next to 34 is 55. It is basically, adding 21 to 34 and the sum is 55. See? It is pretty easy, right?
While predicting changes that will take place in the future, the number sequence is used to determine how the trend will flow. Fibonacci is a reliable Forex indicator; its outcomes are reliable. As a result, there are many large firms and banks use this to follow the market fluctuations or movements. You can definitely include Fibonacci charts in your short list of best Forex indicators.
The ratio of any number to one of the highest number is 0.618. For instance, 8/13 = 0.618. If the ratio between alternate numbers is measured, the result would be 0.382. For instance, 1/3= 0.382.
You can trade by using these numbers and you have the chance to make a profit. You can expect fairly accurate results by using this method, although not 100%. Using Fibonacci charts for Forex trading works on any time frame, from minutes to days, weeks, months, and years. The sames goes for Candlestick charts.
There are a lot more indicators, but these are on the top of my list of best Forex indicators.