Understanding Bollinger Bands and Pivot Points is one of the elements that make a reliable forex trading foundation. And comprehending them will allow any trader to do top-level forex trading.
Thus, there are different types of technical indicators with different results in practice. In this occasion, we will show you the repainting indicators and the non-repainting indicators, their differences and which of them has a better chance of helping you to guess in a prediction.
Some of the things that can influence your decision making would be human fear and greed, which are things that can’t be felt by Forex robots, they are constantly making unbiased trade decisions, making an easier and faster path for users to reach their trading goals.
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Traders have to make use of indicators in order to use proper strategies and make successful trades in the market; these indicators are statistical tools that let them make critical decisions about the heading direction of a currency pair.
There is a popular discussion among Forex traders about the different types of indicators that are available. Whether the indicator is leading or lagging, repainting or not repainting, how accurate it is and so on.
Most traders don’t know the proper way in which to use the signals or the indicators they are given. For example, every buy signal from the MACD is not supposed to be followed with a long trade. Every buy signal doesn’t mean that the market will shoot right up or that it will go higher by a certain number of pips in every situation.
We all know about the MACD oscillator – one of the most widely used indicators in technical analysis.
Frequently asked questions of traders are: "What kind of indicators should we use in trading?" Or often traders ask "without which indicators you can not trade?".
Of course, there is no unambiguous answer to these questions. Different indicators monitor and evaluate various factors and market trends.
There is, however, one that provides us with information about support / resistance, and trends at the same time. This indicator with the whole name is called Ichimoku Kinko Hyo, also known in short form as Ichimoku.
You have probably noticed that we frequently talk about the 50, 100 and 200 period moving averages in our daily and weekly posts that are regularly published in the FxTradingRevolution news section.
Considering that one of the basic rules of technical analysis is essentially a self-fulfilling prophecy, it’s no wonder that these 3 moving averages work so well in the Forex market. Basically, the more people look at and trade by the same price level the more likely it is for that price to be important in some way (i.e. to be a point of reversal). Since a lot of traders are plotting the group of the 50, 100 and 200 moving averages on their charts, it only makes them a more reliable trading indicator.
We often hear that we should not plot too many lines and/or indicators on our charts when we trade Forex. This advice and the reasons cited behind it are certainly valid.
And indeed, that is probably not far from the truth. There is a general principle in life - commonly known as the 80/20 rule which states that 80% of the results usually come from 20% of the input (work). There is hardly any strong argument that can prove this statement wrong in trading, so it’s a good statistic to keep in mind. Normally, for most traders, about 80% of the profits will come from about 20% of the trades.
A range does not have to be a horizontal one, however, rather it can be in any form inside of which the price is contained for a certain period of time. Consolidation patterns, such as flags, triangles, and channels can also be considered ranges that can be traded if they appear on the larger timeframes. In general, the trading range will be defined on a larger-scale timeframe while traders will look for entry opportunities on lower timeframes.
However, in the real market things are not always so simple and the price doesn’t always bounce between two perfectly horizontal lines. That’s why different indicators were constructed to try and predict the most probable trading ranges in the market. One of the best indicators for this purpose are definitely Bollinger Bands.
Volatility is something that is always present in markets, but many novice traders are not really aware of or don’t pay enough attention to. Yet, volatility is an absolutely crucial aspect of trading financial markets because when volatility changes the rules of the game usually change with it. Thus, very often new situations are created in the markets where what worked in the past doesn’t work now.
The correlation indicator for MetaTrader 4 is a very valuable trading tool that can be downloaded for free from our website at the following link:
The popular MetaTrader 4 platform, by default, does not include any such indicator or tool that is able to display two different instruments or currency pairs on the same chart. Thus, our indicator comes in handy for conducting this very valuable analysis for Forex trading.
We know for a fact that some currency pairs, and also some completely different types of financial assets for that matter, are highly correlated. Examining these correlations in real time can give us additional information about a particular currency pair and enable us to pick the market turning points more accurately and also more profitably.
In this first article of the series on Pivot Points, we’ll discuss one of best ways to use them in your trading which is the 70-80% rule. In this introductory article here you can read about the basics of pivot points and how each of the Pivot Point levels is calculated, while in subsequent articles in this series, we’ll discuss some additional great ways in which Pivot Points can be used to gain an edge in the markets.
Despite all the similarities, there is a fundamental difference between the Heiken Ashi charts and the standard charts. To understand this, let’s first look at how Heiken Ashi charts are constructed and then we’ll examine different ways in which they can be applied in trading.
One of those, and also one of the most widely used techniques in the trading world, are the so-called Overbought and Oversold values.
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