Best Forex Indicators: Categories, Types and Effectiveness of Trading Indicators

volume weighted average

ТYou may also refer to the economic calendar when trading in the daily timeframe. Some assets have higher volatility during a particular trading session. Indirectly signals the moments of a sharp imbalance in the market. The tool helps not to miss the beginning of the spread widening due to the growth of volatility. The indicator builds the key levels where the trend could reverse. The trend is best to recognize when the sideways trend is finished.

Down volume is the volume on a day when the price falls. Each day volume is added or subtracted from the indicator based on whether the price went higher or lower. First up, use theon-balance volume indicator to measure the positive and negative flow ofvolumein a security over time. RSI and stochastics can be used as stock-picking tools, but you must use them in conjunction with other tools to spot the best opportunities. It is an oscillator, which means it displays as an underlay indicator and fluctuates between readings of zero to one hundred. The maths behind the indicator is comparing the size of ‘up moves’ versus ‘down moves’ – so the idea is it compares the ‘relative strength’ of the bulls versus the bears.

Fibonacci Retracement Indicators

The ADX is the main line on the indicator, usually colored black. There are two additional lines that can be optionally shown. These lines are often colored red and green, respectively.


The KST indicator will be of interest to traders, who prefer long-term trading systems, aiming to search trend movements and position reversal on the local corrections. MACD is a popular trend following indicator of the oscillator type. It measures the degree of divergence or convergence of the exponential MAs. The primary MACD line defines the price momentum, whether it is up or down. The signal line helps to identify the pivot points of a steady trend and provides entry signals.

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Volume is the trading volume of the current candlestick. MA is the moving average of the current candlestick for period N. MA(N,i-1) is the moving average of the previous candlestick. You can also specify the MA type and the price type in the Force Index index. The VWAP will be of interest to professional stock traders. Beginner traders had better use the Forex version of the VWAP, which has only one line.

upward or downward

Pivot points are using the high, low, and close prices of a defined period, i.e day, week or month. In simple words, the pivot point is the average of the high, low, and close. However, we also calculate a series of support and resistance levels which are equally spaced above and below the pivot point. Fibonacci trading is one of the more popular stock trading indicators. Oftentimes, you’ll see Futures, Forex, and stock markets react to Fibonacci numbers and levels really well.

Moving Average Indicator (MA)

The most popular fall into three categories, as explained in the following momentum indicators list. Alligator is a trend indicator based on moving averages. The wider the distance between the MAs, the stronger the price momentum.

They can tell you whether a trend is strengthening or weakening. On the other hand, in case this value reaches near 30 and is trying to go even lower, an oversold situation is seen and thus a buying signal is generated. From the above image, one can take a particular position only by viewing the trend line. StochRSI Combines Stochastics with the RSI indicator to help you see RSI changes more clearly. Rate of Change and Momentum Shows the speed at which a stock’s price is changing.

When the indicator is moving in a different direction than the price, it shows that the current price trend is weakening and could soon reverse. Therelative strength index has at least three major uses. The indicator moves between zero and 100, plotting recent price gains versus recent price losses.

What are the Best Swing Trading Indicators?

TTM Squeeze A volatility indicator used to identify periods of consolidation and determine the likely direction of the resulting move. Relative Volume A set of indicators/overlays that compare current volume to the average, in order to identify conditions where unusually high or low volume is powering a price move. Detrended Price Oscillator A price oscillator that uses a displaced moving average to identify cycles. Volume-Weighted Average Price An intraday indicator based on total dollar value of all trades for the current day divided by the total trading volume for the current day.


The Zig Zag indicator fluctuates between a significant high and significant low thus plotting swing highs and lows. If the values are below 20, it signals that there is no trend to capture. The greater the number of ADX, the more momentum there is trading in a certain direction.

These trading platforms will help you to see the trading charts, to understand how price is moving, and to add as many indicators as you need. The ATR is used to measure realised volatility, i.e., the indicator of how much the market has moved over a selected period. The information is useful for day traders looking forward to deciding where to place Stop-Loss or Take-Profit orders. While looking at a price chart, you can see the price of the selected asset fluctuates wildly. The Moving Averages smooths out the price while taking the price average over a rolling number of periods.

How do technical indicators work?

With the best swing trading indicators, you can make accurate predictions about what a stock will do. You’ll be able to tell if a trend is bullish or bearish and what the momentum behind that trend is. You can use your knowledge and risk appetite as a measure to decide which of these trading indicators best suit your strategy.

It compares the asset’s closing price with its high-low range over a certain period. Even better, the SO functions well regardless of volatility, even in the fast-moving cryptocurrency market. The Fibonacci retracement levels are popular and helpful crypto trading tools that can help traders identify turning points in cryptocurrency prices. They provide hidden levels in the form of horizontal lines, indicating when to expect support and resistance levels on a given price chart. Momentum indicators and oscillators are technical tools that measure the rate of the price change over a specified period.

volume weighted average

The above screenshot displays four signals to enter a sell trade. It can be recommended to beginner traders mastering new professional tools. It also will be of interest to scalpers and swing traders. At the section marked with box 1, the RSI has been in the oversold zone for a long time, which is a signal of the trend reversal.

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A big component of its formula is the ratio between the short term trading indicators gain and average loss over the last 14 periods. The RSI is bound between 0 – 100 and is considered overbought above 70 and oversold when below 30. Traders look to sell when 70 is crossed from above and look to buy when 30 is crossed from below. Average Direction Index won’t tell you whether the price is trending up or down, but it will tell you if the price is trending or is ranging.

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