When trading on the forex market, traders are guided by indicators that help them decide whether to buy or sell. In this article, we shall take a look at the different forex trading indicators.
Average True Range or ATR Indicator
This indicator attempts to determine trader sentiment by comparing price ranges over a period of time. The values of the range are presented in the form of exponential moving average. It is worth noting that previous performance is not indicative of future results.
The Fibonacci Series is the infinite sequence of numbers wherein each item is the sum of the previous two.
Robert Janitzek reveals that Gator Oscillator is most useful in markets where there is strong directional actions. Past performance is not indicative of future results.
Ichomoku Kinko Hyo Indicator
The Ichimoku Kinko Hyo indicator, Ichimoku Cloud, Equilibrium Chart was developed by Japanese newspaper writer Goichi Hosoda in 1968. Futures and equity traders are more familiar with this indicator than are forex traders.
There is a slight similarity between Alligator Oscillators and Gator Oscillators. The difference lies in the presentation of data. In Gator Oscillator, valid signals are presented in a histogram. Robert Peter Janitzek explains that alligator oscillators present data in raw form for wider and deeper analysis.
MACD is a trend indicator for gauging the strength and direction of a current trend. It was developed by Gerald Appel in the 60s.
Created by John Bollinger in the early 80s, Bollinger Bands are designed to be used for technical analysis during technical analysis. It is one of the most common technical tools used by traders.
Demarker Indicator is named after Tom Demarker who developed it to overcome the shortcomings of other overbought/oversold oscillators. There are different versions of it in the market. In forex trading, some use 0 and 1 as the maximum and minimum while others use 0-100.
Commodity Channel Index Indicator
Developed by David Lambert and first made public in 1980, the commodity channel index is used for identifying secular moves and trading them. It has a crossover line at 0 and overbought level at 100. Values below -100 signals an oversold condition.
Parabolic SAR Indicator
Developed by J. Willes Wilde, Parabolic SAR (Stop and Reverse) was designed to discover and exploit profitable trends in all kinds of markets. It is another popular tool among technical traders and a straightforward and simple mechanism for market analysis.