Bollinger Bands Indicator

Bollinger bands are used to measure market volatility. They act as light support and resistance levels.

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Reaction to Bollinger

• This strategy is based on the assumption that the price usually goes back to the middle of the Bollinger Bands.
• You buy when the price hits the lower end of the Bollinger Bands.
• When the price hits the upper Bollinger Bands, you sell.
• It is best used in suffering markets.

Bollinger Bands

• This strategy is used for early hunting of price breaks or breakouts.
• When the Bollinger Bands are so-called “squeezed”, it means that the market is very calm and failure is imminent. As soon as a failure occurs, we enter the trade from whichever side the price breaks.

MACD indicator

MACD is used for early tracing of trends and can also help us identify trend reversals.

• This indicator consists of 2 moving averages (one fast, one slow) and vertical lines called histograms that measure the distance between two moving averages.
• Contrary to many people’s beliefs, these moving average lines are not moving average prices. They are the moving average of other moving average.
• The MACD drop is delayed because it uses a lot of moving averages.
• One way to use the MACD is to wait for the fast line to cross the slow line and go below / or above it, and enter the trade accordingly because it indicates the formation of a new trend.

Star Parabolic Indicator

This indicator is designed to identify the reversal of the trend, which is what it means and means: Parabolic Stop And Reversal (SAR)

This indicator is very easy to interpret because it only provides ascending and descending signals.

• When the points are above the candlesticks, it is a sell signal.
• When the points are below the candlesticks, it is a buy signal.
• The best use of this indicator is in trendy markets that have long price rallies and price falls.

Stochastic indicator

• It is used to indicate the conditions of over-buying and over-selling.
• When the moving average lines are above 80, it means that the market is over-bought and we have to look for sales.
• When moving average lines are below 20, it means that the market is oversold and we should be looking to buy.

Relative Strength Index  (RSI) Indicator

• It is similar to Stochastic in that it reflects the conditions of over-buying and over-selling.
• When the RSI is above 70, it means that the market is overbought and we have to look for sales.
• When the RSI is below 30, it means that the market is oversold and we should be looking to buy.
• The RSI can also be used to confirm trend formation. If you think a trend is forming, wait for the RSI to go above or below 50 before entering the trade (depending on whether you are following an uptrend or a downtrend).

Average Direction Index Indicator  (ADX)

• ADX calculates the potential strength of a trend.
• This indicator fluctuates from 0 to 100 and readings below 20 indicate a weak trend and readings above 50 indicate a strong trend.
• The ADX can be used as a confirmation of whether the pair is likely to continue its current trend.
• ADX can also be used to determine early closing of a trade. For example, when the ADX starts to fall below 50, it indicates that the current trend is probably out of breath.

Ichimoku Kinko Hugh Indicator

The Ichimoku Kinko Hyo (IKH) is an indicator that measures future price momentum and identifies future support and resistance areas.

Ichimoku means “one look” in Japanese, kinko means “balance”, and hyo means “chart”.

Adding all this together, ichimoku kinko hyo stands for Equilibrium Chart.

• If the price is higher than the Senco cycle, the top line acts as the first level of support and the bottom line acts as the second level of support. If the price is below the Senco cycle, the bottom line is the first resistance level and the top line is the second resistance level.
• Kijun Sen as an indicator of future price movements. If the price is higher than the blue line, it can continue and go higher. If the price is below the blue line, it may fall.
• Tenkan Sen is an indicator of market trend. If the red line is moving up or down, it indicates that the market is trending. If it moves horizontally, it indicates that the market is suffering.
• Chikou Span is a delay line. If the Chikou line crosses the price line from the bottom up, it is a buy signal. If the green line crosses the price from top to bottom, it is a sell signal.

Each indicator has its own shortcomings. This is why Forex traders combine different indicators to screen them.

As time goes on and you become a professional in trading, you will automatically learn which indicators you like the most and you can combine them in a way that suits your trading style.

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