Use of Forex Trading Indicators

Use of Forex Trading Indicators : Previously we discussed the next After selecting indicators and learn how to select indicators, trade, today we will talk about how the indicators in Metatrader. But I do not want to talk about it after that indicators such as the number of indicators in Metrateder 4 there are more than 30 indicators. So I will summarize by explaining some of the indicators that are often used by traders.

Relative Strength Index
Relative Strength Index or RSI is used to calculate the relationship between the rise and fall of prices. RSI value of 0-100 is used. RSI function is to determine whether the price is overbought or oversold.

The use of RSI
When we use the RSI indicator, RSI value when prices are very high (above 80), then it is time to sell and when the RSI value means low (below 20), it is time to open the Buy to do.

MACD
Moing convergence divergence indicator function of the average trend of what is happening. In it there are 2 lines MACD signal line and the MACD line. For signal line is usually red, calculated for 9 days, while the MACD line is calculated from the reduction for 26 days and 12 days. MACD can also be used to determine when to buy and when to sell.

Using MACD
If posirif MACD line and the MACD signal line cut from the bottom up, it is time to buy and if negative MACD and the MACD signal line cutting line, then it is time to sell.

Parabolic SAR
Parabolic SAR (Stop and Reversal) is used to determine whether the change in the stock price. Parabolic SAR indicated by dots above or below the graph.

Using Parabolic SAR

When the Parabolic SAR indicator price, then it's time to buy, and when the Parabolic SAR is about money, it's time to sell.

Moving Average
Moving average or MA frequently used indicator dealer. This indicator is used to calculate the average price movements of a financial instrument over a period of time. Usually within 5 days, 10 days, 20 days, 50 days, 100 days or 200 days. There are 4 variants of Teachers in technical analysis, which is used:

    Simple Moving Average (SMA)
    Linear Weighted Moving Average (LWMA)
    Exponential Moving Average (EMA)
    Smoothed Moving Average (SMMA)

For more information about the condition and perbaedaan of 4 variations MA Adala as follows: Connect the indicator moving average chart, which will be similar to the image below.

Moving average indicator - Forex ZoToZ

From these images, we can choose the MA variant, simple, exponential, smoothed, weighted linear. To distinguish four variants of the above, it will give a different color for the same period. To change the color, you can use the column style. Variations Pasa Simple Moving Average (SMA) provide a red color, while the exponential change moving average (EMA) and smoothed moving average (SMMA), we provide the yellow and blue colors, and linear weighted moving average (LWMA) gave us white . Provide up to 4 color variations, then we can see which of the four versions of the sensitive and insensitive to price.

Variations Moving average indicator - Forex ZoToZ

Moving average of four variants of the above, it turns out that the most sensitive (more than react quickly to changes in the price) is a type of SMA, EMA and LWMA. Therefore, all three variants are usually used for short-term trading. While variations MA SMMA less sensitive in response to price changes in the development stage and is usually used for long-term operation. A more sensitive indicator would be very useful to predict the price, but sometimes the most sensitive indicator of frequent false signals (signals generated may be incorrect or shorter). If you want to play it safe, then the most suitable option is a variation on the high school to use compared to other variants. But do not play the risk, according to the great joy, but also great risk. They can choose from high school, because it is more sensitive to variations in the signal. However, all variations of the indicators to be used only as an aid in making decisions, while we are the ones who actually indicators based on the guidelines for the decision.

Using a moving average
MA use is very simple: Let's say you do MA with period 8 (red) and 12 (blue). Then, when the time period MA 12 MA 8 sections from top to bottom, it's time for us to sell. Conversely, if 12 MA MA Period 8 Period piece from the bottom up, then it is time to buy.

Stochastic Oscillator
Stochastic Oscillator is an indicator that shows the position of the last closing price of the lowest or the highest price range over a given time period.

Using stochastic oscillator
Using stochastic oscillator is when the value is above 80 and oversold stochastic said, it means that it is time to sell, but if the value is below 20 and they say oversold stochastic, which means it's time to buy. As you can see from the% K and% D. When the% K crosses% D, that means it's time to buy. And when the% K crosses% D means down, it's time to sell.

William percentage
William Percent Range (WPR) is an indicator to show whether the price is overbought or oversold presented. Sedah overbought prices tend to fall, while oversold prices tend to rise. Adala indicator value for 0-100.

William usage percentage

Basically, the use of these indicators is easy. If the price of a high value, about -20, then it is time to sell and when prices are very low values, below -80, then it's time to buy.

Bollinger Bands
Bollinger Bands are an indicator that consists of two lines, which is limited by the standard deviation from the center line produced. Bollinger bands are used to determine the price volatility. This indicator will be expanded due to fluctuating prices and tightened when prices move relatively flat.

The use of Bollinger bands
How to use Bollinger Bands indicator when price touches the line, it's time to sell us. Conversely, if the price touches the bottom line, it's time to buy. But keep in mind that if the price is out of line above or below the line, maybe the movement will continue.

Money Flow Index
Money Flow Index (MFI) was developed by Laszlo Biriyi Jr.. This measure how much the flow of money in and out of security products. This indicator is similar to indicator Relative Strength Index (RSI), the difference of the RSI indicator taken into account only price, but also take into account the volume of MFI screen.

MFI comparing cash flow positive and negative cash flow, an indicator that the price is to get compared. This is done to identify the strengths and weaknesses of a trend. Such as RSI, MFI indicator using a scale of 0-100, and usually use a 14-day period. The greater use period period of time, the movement of the index fluctuations MFI smoother and more stable.

The ratio of positive cash occurs when a special price for a special price today is greater than yesterday. While the ratio of negative cash flow occurs when a special price for a special price today is less than yesterday. Number of positive cash price is calculated as the sum of positive cash flow in the period indicated. After payment, a negative pulse is calculated as the sum of the negative cash flow for the period specified.

Use the money flow index

Use the MFI indicator is similar to using the RSI indicator (oversold) as an indicator of trend reversal (divergence) or as an indicator of overbought point (overbougth) or oversold point can be used.

If the size of the MFI movement direction opposite to the direction of movement of the price of a product, perhaps a change in the direction of performance for sure. However, this situation for a long time, new kemudianterjadi price change trend toward time-consuming. Therefore, we recommend the use of these indicators, coupled with the use of other indicators.

With this method can provide estimates that a buy signal appears, it would be if the direction of MFIs has increased, while the direction of the price decline. Instead sinyak sale arises when the direction indicator MFI fell, while the direction of the price.

MFI display can also be used to determine if the volume is too much or too little interchangeable. If there is too much volume traded, it will happen kedaan overbought so investors tend to fall. If we use a method based on volume, then a sell signal (sell) appears when the MFI is above 80 and shows a buy signal (buy) when the MFI of 20.

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