Progress in technical analysis makes the trading process easier and more productive. Forex indicators are very popular assistants that represent price derivatives and help to identify implicit trends on the chart, levels of price correction, breakouts, the pivot points, changing tendencies and so on. However, the diversity of programs is so great, that sometimes it is difficult to choose the best one.
How to select an indicator?
There is no perfect software. All programs have their own pros and cons and specific aims. First of all, a trader should know for what he needs a technical assistant. There are several types of leading Forex trading indicators:
The main purpose is trend prediction, i.e. to identify tendency and forecast price movements. An indicator of this type is able to depict the market sentiment, what becomes a good basis for profitable trading. Assistants are included in many terminals. You can look at the list of top trading platforms and take part in voting for the best one in this or that category.
Most popular free Forex indicators of this type are:
- Parabolic SAR
- Moving Average
Such programs are used to calculate amplitude of price fluctuation and correlation for a particular period of time. Volatility analysis helps to see the current trend and predict the price movements.
Examples of programs are the following:
- Volatility Hyper Trend
- Better Bollinger Bands
- ATR Channels
- Keltner Channels
Such Forex technical indicators (as Stochastic, Forex Turbo Scalper, Camarilla DT, Free scalping indicator and the like) are the part of scalping strategy and help to make decisions during intra-day trading. As scalping is a type of trade that gives an opportunity to take profit from small swings in prices of a currency pair, indicators should be fast, accurate and easy to interpret.
The main point is to count the number of transactions per one unit of time. Such approach helps to detect the increase and decrease in demand, what become an alert for the end of trend.
Among indicators of this type are:
- MACD and Volumes (is considered to be the best Forex indicator of this type)
- Volumes Suite
- Candles Suite
- Normalized Volume
TOP-3 best Forex indicators
Probably no trader can get without this indicator, that depicts the changes in prices by means of horizontal lines that help a user to make a choice between buy (blue lines) and sell (red lines). It belongs to free Forex indicators and when well-tuned, it works profitably and correctly.
This complex program has been worked out as a multifunctional instrument with levels and figures, defining various activities in the market and consisting of different other Forex technical analysis indicators. The application overlays its figures directly on the candlestick pattern chart. One of the major figures is "Butterfly Gartly", which is based on the ratio of Fibonacci numbers together with fractal and other elements.
This program can be called one of the best technical indicators for Forex. It is universal in its usage, as setting only Way Market on the chart of the currency pair, a trader will immediately receive the output data from the five most popular indicators. Moreover, the indicator is not reducible to a simple conclusion obtained data, all the settings are pre-processed and provided in the most convenient form in a round-a-clock mode.
How to tune up a Forex indicator?
- Define what an indicator should depict (trend strength, direction, levels of support / resistance, divergence and so on).
- Set a timeframe (it depends greatly on the trading strategy).
- Study, how the software works by investigating the history of charts.
- Determine the types of signals (advance of delayed).
- Set and reset parameters on the dashboard, achieving the needed quality of signals.
- Test the program on a demo- or micro-account.
These simple rules will help you to improve your work with technical assistants and organize trading in most comfortable way.
Practically every indicator can become best for the trader, who has managed to tune it up according to their own needs. The main point is to scrutinize the program's potential and test its capabilities, not forgetting to consult the economic calendar. With time and experience every trader may work out his own best Forex technical indicators, which will lead to successful profitable future.
Article by Forex-Awards.com
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