Simple forex strategy
You must have dreamed of a robot that would do everything for you: take out the garbage, wash the dishes, clean up after the cat. And it would be even better if it traded on Forex, and also with huge profits. There is a lot of Forex Expert Advisors and algorithms on the Internet - take it and get rich. It is difficult to find a useful robot and to buy it expensively. This is not the best idea for a beginner. But the fundamental Forex indicators embedded in the trading platform can be used for free. Let's start with them and start.
What are Forex indicators - a definition for the humanities
Forex indicators are mathematical formulas that predict future price movement. The initial data of these formulas are past prices and volumes.
Market indicators are technical analysis in action - a smart algorithm collects data about past price and trade volume behaviour, analyzes it and makes a forecast for the future.
For a trader to apply the results of indicator calculations, they are displayed graphically and superimposed on the charts of currency pairs in the trading platform.
Technical analysis is an attempt to guess where the price will move in the future, based on its behaviour in the past.
Each indicator gives the trader hints - specific patterns (patterns) or intersections with the price line, which a trader perceives as signals to enter or exit the market. On one chart you can use combinations of indicators for a complete picture.
Pattern - a secret meaning, which is seen by traders in the interlacing of charts. About the same way, ancient astronomers gave names to constellations.
Forex market indicators are not the same as Expert Advisors or robots. They do not make deals for a trader, but only give him recommendations, which should be able to read.
Types of Forex indicators in the MT4 trading platform
There are so many indicators. Theoretically, each trader can create his symbols. Experienced traders write it sell signs, so there are a lot of paid offers in the network.
You can use forex indicators for free in MT4 terminal. These are fundamental indicators, which have proved to be excellent. It makes no sense to buy something without learning the open opportunities, so we start with the key indicators in MetaTrader 4.
Trend Indicators - where are we going?
Trend indicators help to understand which trend prevails in a specific time interval. Trend indicators add a line to the price chart, which synchronously with price movements or with a slight delay indicates that the trend continues or changes.
The trend is the direction in which price moves in a certain period. Patterns can be ascending, descending, lateral (flat).
Trend indicators level out false market signals and indicate the trend. Traders most often resort to these indicators:
Oscillators - history repeats itself
The term "oscillator" comes from the Latin word oscillo, i.e. "swaying". The market situation is continually changing; the price rises and falls and swings. Unlike trend indicators that follow the price, oscillators are ahead of it. They try to predict the future trend of price movement, based on the speed and magnitude of price fluctuations in the past. The point is that everything is repeating itself.
Oscillators are indicators that show market overbought and oversold levels and predict future price direction.
The oscillator itself looks like a curve line that is at the bottom of the price chart. It keeps moving between certain levels: maximum and minimum. Maximum level means that the market is in an overbought state. The minimum level is an oversold state. When the oscillator curve approaches one of these levels, a buy or sell signal is received.
Overbought market, Overbought is a situation when prices have risen too high and quickly, and a fall in prices is expected soon.
Overbought market, Oversold - a situation when prices have fallen too low and quickly, and an increase is expected soon.
Traders prefer the following oscillators:
Volume indicators or Volumes - everything that exists is a number.
It is difficult to get information about volumes at Forex because it has no specific location. But MetaTrader4 terminal has a built-in tick volume indicator.
A tick is a one-time price movement in one direction or another.
The volume indicator shows a trader the number of ticks in a certain period. It is not a real trading volume on the market; it is only the number of price changes.
The Volumes indicator is displayed as columns.
The higher the column, the more the price has changed. Tick changes give an approximate idea of real volumes. It is necessary to understand when the trend will turn around. Thus, if tick volumes have significantly increased, it is likely that soon the price will move in the opposite direction.
Types of volume indicators:
Indicators of Bill Williams - genius dominates chaos
Bill Williams' indicators are author's indicators that define the market structure in five dimensions. One of the most ambiguous types of signs.
Bill Williams, a brilliant trader and developer of a separate class of signs, considers Forex as a chaotic system. He claims that standard forecasting methods do not make sense in technical analysis. For him, the financial market is chaos, which is controlled by some driving forces. Williams' indicators define these forces:
Bill Williams' fractal;
How to Use Market Indicators
Forex indicators make trading easier if you know how best to use them. In the next articles, we will consider in detail how to read the signals of the symbols on the chart. And now we have prepared some general tips:
Combine 3-4 symbols on the table simultaneously.
Get ready to spend money on an active author's indicator. Do not believe in "grail" sellers.
Buy indicators weighted - read reviews, study characteristics, pros and cons.
Do not trust the indicators 100%, be objective.
Always consider a fundamental analysis. Indicators can be useless in case of sharp market fluctuations during important political and economic events.
Have successful trading with Forex indicators!