Forex traders make money when currency rates change. However, the market remains stationary most of the time; there are trends only 15% to 30% of the time. Therefore, it’s important to know when a trend is likely to develop.
Technical Indicators
Technical indicators help you make more informed trading decisions. These technical indicators are calculated from basic market data such as price and volume, and give you signals when to buy and sell specific currency pairs.
There are many types of technical indicator, but they fall into three main categories:
- Trend indicators show the current price direction and any changes in that direction
- Oscillators predict changes in price direction before they occur
- Psychological indicators show the market sentiment – such as bulls and bears
Keep in mind that technical indicators are indicators, not guarantees. Compare multiple indicators and make your own trading decisions.
MetaTrader 4 has a wide range of built-in technical indicators.
Average True Range (ATR)
The Average True Range (ATR) shows the degree of volatility in the market. It was first introduced by Welles Wilder in his book “New Concepts in Technical Trading Systems”. It’s used widely in trading systems and is the basis of several other technical indicators.
Bears Power Indicator
In the forex market, there are two types of trader: Bulls – who buy a currency because they believe the market will go up Bears – who sell because they think the market will go down Currency prices go up
Bulls Power Indicator
In the forex market, there are two types of trader: Bulls – who buy a currency because they believe the market will go up Bears – who sell because they think the market will go down Currency prices go up
Acceleration/Deceleration Oscillator
The Acceleration/Deceleration Oscillator (AC) measures whether the market driving force is increasing or decreasing. It gives you an early warning of changes in price direction: