The most accurate Forex indicators

The Forex indicators are the special program that works based on mathematical algorithms and helps a trader to read the chart more efficiently, monitor the market situation, and make decisions regarding the conclusion of transactions. Thanks to indicators, traders can more accurately predict future price movements and better analyze current movements.

What traders used to do for hours and manually can now automatically calculate a good indicator, correctly pre-configured and suitable for a trader in terms of trading style, conditions, currency pair, etc.

The main types of Forex indicators

  1.                Trend indicators – confirm/deny current market trends by focusing on chart divergences and making affective forecasts.

2.            Oscillators (Forex inertial indicators) are the most popular, are simplified, measure the magnitude and speed of price fluctuations, and analyze price behavior.

3.            Psychological – they study the mood prevailing in the market, make predictions actions of trade participants

4.            Signal – indicators that provide information about the market situation in the form of ready-made signals ( tips for certain actions in the form of arrows ).

5.            Bulk – measure trading volumes.

6.            Hybrid – suggest a combination of at least two instruments included in the standard set of the trading terminal.

7.            For binary options.

8.            Custom – those that traders independently create and share in the public domain on the network (free of charge or for a certain amount).

The indicator is considered to be an auxiliary tool that can make it much easier for a trader to perform technical analysis. Based on the indicators, a lot of trading strategies, systems, robots have been compiled. Trying to determine the best Forex indicators in existence today, each trader should focus on his trading style, preferences, conditions, and other individual factors.

Before choosing an indicator, it is necessary to determine the following basic parameters: does the instrument correspond to the market, what is its principle of operation (which shows why and how it calculates values), how the instrument is used in operation.

You ought not to exchange with markers, the standard of which the dealer doesn’t see well – for this situation, even the most exact Forex pointers can cause misfortunes since any (and most advanced) automatic system requires human participation and the ability to make their own decisions in difficult situations.

Many indicators are already preinstalled in the most popular trading terminals – for example, MetaTrader4 / 5 offers a fairly large selection of standard instruments. Besides, there are many indicators on the web – for free or for a fee.

Before starting the indicator to trade it is advisable to check it on historical data, to evaluate the features, advantages, and disadvantages.

Historical modeling does not guarantee 100% success in the future, but it often allows you to adequately assess the quality of the tool. It is also important to find the optimal indicator settings to receive accurate signals for entering and exiting the market.

You should not try to use all successful Forex indicators in your work at once – an overloaded system will provoke signal delays and may cause a conflict of indicators. It is better to stop at one, the most appropriate tool, and learn it.

If you are going to use the Forex indicators in your work, you should not rely on it completely and consider it the only condition for the profitability of trading. The indicator only allows you to better understand the current situation on the market and indicates entry points.

But the tool will not prompt such parameters

•             Optimal trade size.

•             Acceptable losses in one trade ( risk management rules ).

•             How to manage all deals that a trader can open at once.

To build a trading system, you can take an indicator that provides timely and correct signals as a starting point. But to create filters for entry/exit points, to define methods of money management, you will need a whole system.

Exponential Moving Average

Moving average ” is the general name for a group of functions, the values of which at all points are equal to the average of the original function taken over the previous period. Usually, this type of instrument is used to smooth out short-term price fluctuations and highlight the main trends (cycles, trends). This is especially important in volatile markets.

Exponential Moving Average ( The Exponential Moving the Average ) allows you to reduce lag, giving greater weight to the latest price value compared to more distant prices. This makes it possible to react more efficiently to all current changes in value (in comparison with the standard moving average). The weight attached to the last price value directly depends on the moving average period: the smaller it is, the more weight the last price has.

So, for example, a 10-period EMA gives the price weight of 18.18%, a 20-period EMA – already 9.25%.

It can be determined by two methods – as a percentage moving average or as a periodical. In the percentage CC, the only parameter is the percentage (weight), in the period – the period.

Basic formula:

Here:

•             i is the current moment;

•             i-1 – the previous moment in time;

•             К – equal to 2 / (n + 1), where n denotes the period of the average in bars.

Ways to change the exponential moving average period

1.            By changing the K.

2.            Change in the moving period – in this case, the coefficient K is considered as 2 / (1 + N),          N is the specified period.

3.            So, for a 10-period EMA, the coefficient will be as follows:

4.            In the calculation of the EMA, all price indicators for the construction period are used, but over time, the influence of the old prices decreases and disappears. For shorter EMAs, old prices drop off faster. On real charts, the difference between MA and EMA is not too big, but there is.

5.            An exponential moving average represents market prices more accurately but tends to be very responsive to changes in value. Traders often use it for short-term trading to catch prices instantly. Here the choice is always between sensitivity and the desire to reduce the number of false signals. The more sensitive the indicator, the more false positives it gives.

The main features of using EMA: use with other indicators and methods of technical analysis, use to determine the current trend, and search for places to place a stop loss. EMAs can also be used as support/resistance zones to receive signals after crossing the lines.

Trading with RSI

This indicator was created by stock trader Wells Wilder and published in June 1978 in Commodities magazine. Later, the tool was included in Wilder’s book, where he presented the essence of the tool in detail, and after that, the indicator became very popular.

RSI (stands for Relative Strength Index, translated as “relative strength index”) is an oscillator, it fluctuates in a certain zone, set by the minimum (0) and maximum (100) values. The tool displays “momentum” – the amplitude and speed at which the price moves, the force of its change in the direction of movement. That is, RSI helps to determine the strength of the trend and the possibility of its change.

RSI indicator values

1.            The more powerful the upward movement of the price (and the greater the total sum of the length of green candles for the n period), the closer the indicator value to 100.

2.            The more powerful the downward movement of value (and the greater the sum of the length of the red candles for the n period), the closer the value to 0.

The indicator formula is simple: it is based on the analysis of the closing prices of candles for the n period and their relative difference (when plotting the chart, only the closing values are used, candle shadows are not taken into account). The indicator shows the strength of the price movement for the selected period of time, based on the strength of the candles for this period.

The main signals of the RSI indicator

•             Overbought and oversold – the indicator reaches 70 and above (the asset is overbought, it is not worth buying, it is better to exit the trade and set above the stop loss) in anticipation of a trend reversal; an indicator below 30 indicates that the asset is oversold and the risk of selling it at the bottom.

•             Determining the direction of the current trend – if the indicator crosses the value of 50, the trend changes, here the price often finds support/resistance. Often, in a downtrend, the price goes to the level of 20, in an uptrend – to 80.

•             Search for support/resistance, trend lines – the classic rule of technical analysis works here. Breakouts of support/resistance, trend lines on the indicator often signal a future breakdown on the price chart.

•             Working out graphic figures – when they are not on the price chart or are poorly visible, the patterns can work well on the indicator chart.

•             Search for divergence – when the values of the price and the indicator diverge: “bearish” is accompanied by an increase in the price highs and a decrease in the highs on the RSI, “bullish” – the price lows are decreasing, and the indicator is increasing. Such situations indicate the possibility of a trend change.

•             To use the RSI indicator more efficiently in work, it is worth comparing its values on different timeframes (taking into account the values of the older TF), 14 is considered the optimal period (a period of 14 candles), 9, 25 are also popular. But it is worth remembering that the longer the period, the more noise on the graph.

•             The optimal values are 30 (defining oversold), 70 (defining overbought), 50 (looking for a trend). But 40 and 80 (uptrend), 20 and 60 (downtrend) can be suitable for finding a trend.

Bollinger Bands indicator

The Bollinger Bands (aka Bollinger Bands )indicator is a technical tool that was created over 30 years ago by financial analyst John Bollinger. The indicator is still relevant today, it is used to build a volatility channel that allows you to determine the trend.

The Bollinger Bands tool uses the following parameters: the number of days for the moving average and the number of standard deviations. The most popular values are 2 / 2.5 standard deviations, which provide an estimate of volatility.

How the indicator is used

•             The curves narrow / widen according to the strength of the market movement.

•             As the curves approach one another, the market becomes stronger. Energy is released as soon as the closing price breaks through one of the extreme curves (standard deviations). If the upper curve is broken – a buy signal, the lower one – a sell signal.

•             After the breakout occurs, the move will go close to the broken line.

•             If during the correction the market reaches SMA20, this is a signal to add positions, because the moving average here acts as support (buy) or resistance (sell).

•             It is worth closing trading positions when the market breaks out the SMA20 at the closing price. This happens because if, when touching one curve (upper / lower), the market bounces off it and breaks out the middle curve, it will definitely come to the opposite curve. For example, if the market hits the upper curve, comes back, and crosses the close of the SMA20, then it comes back and hits the lower curve.

Stochastic Forex Trading Indicator

This instrument was created in the 50s of the last century by George Lane. When it became clear that the price movement in the market obeys certain laws, they began to look for patterns and develop methods for predicting future value. Stochastic is one of the first indicators that are still relevant today.

The Stochastic Oscillator measures the rate of change in price (price impulses). It is used to determine the dynamics of the Open closing prices about the High and Low range of quotes for a certain period of the number of days. This is how the speed of the market moves.

The oscillator demonstrates the difference between the value of the current day and the quote, which was several days ago. The process is continuous, displayed on the chart in the format of the Stochastic indicator curve. The standard period is 14 days – that is, the indicator shows the movement of the values of the Open close price in the range between High / Low over the past 14 days.

The ratio is measured in percent from 0 to 100. So, if the oscillator shows 80% or more, the Open price reaches the upper border of the price range, if 20% or less, the closing price reaches the lower border of the range. When the Stochastic curves are between these levels, the asset’s Open price is between its High / Low values.

An indicator of 75% indicates that the price is between the minimum and maximum closing values 75% closer to the high level of the day. If every day the market closes at its maximum values, the Stochastic will show 100% values.

How Stochastic indicators are calculated

•             The period of the % K curve is the indicator period.

•             Period of the % D curve – the period of the oscillator signal curve, this is the MA from the% K curve.

•             Ease – additional smoothing of both curves.

•             Prices – this menu allows you to select prices from Open / Close and High / Low to calculate the indicator.

•             MA method – the method for calculating the% D line is the same as for an ordinary MA.

•             One Stochastic line is displayed as a curve, the other as a dashed line. Solid curve (% K) – main, dotted (% D) – signal.

The main signals of the Stochastic indicator

•             Overbought – when the curves go below level 20 and oversold – when above level 80: if the curve goes from bottom to top, open a short position, if from top to bottom, then long. More signals: to buy when the signal curve% D crosses the level 20 upwards and to sell when the level 80 downwards. It is better to wait for the development of the movement of the oscillator curves into the zone between the overbought/oversold levels with the price, leaving stop losses at 80 or 20 …

•             Divergences are when the% D or% K curves diverge from the direction of the value. As soon as the price shows a new low, located below the previous one, and the indicator shows a higher low, this is considered a divergence (signal to open a long position). They use divergences that appear below 20 and above 80.

•             Bullish (upward) trend – when the indicator is in the range of 100-50, bearish (downtrend), if in the range of 0-50.

Stochastic works well on long time frames with a large price range and gives clear signals in case of a stable trend.

MACD indicator

Forex Moving Average Convergence Divergence demonstrates the convergence (convergence) and divergence (divergence) of moving averages. It is plotted as the difference between the two MAs, displayed in the format of vertical bars. The signal line is the moving average of the MACD line itself. The indicator refers to oscillators and is used to analyze the strength of the trend.

To build the indicator, use EMA with periods of 26, 12, the moving average (period 9) acts as a signal line.

The formula looks like this: MACD = EMA12 – EMA26 – EMA9 * (EMA12 – EMA26).

This oscillator is usually used to confirm signals: when the MACD dashes are located above the zero lines, the trend is upward, if below, the trend is a downtrend. A buy confirmation signal is relevant at the moment when the MACD histogram is above the zero lines, a sell signal – the histogram must be below the zero lines.

Convergence/divergence can be considered an additional signal. A signal appears when the price forms new, higher highs, and the indicator bars are located at a height lower in comparison with the previous peak. The bullish trend starts to weaken, the price may go down. The same rule works the other way around.

RoC indicator – accurate and advanced

While trying to find the most accurate Forex indicators, many traders pay attention to the Rate of Change. RoC is an indicator that demonstrates the rate of change in the prices of a selected asset. This oscillator is often used to find emerging trends, as it is considered leading.

The tool is based on a formula that compares the current price values with indicators for previous periods. The higher the rate of change, the more chances that soon the price will go where the indicator is currently going.

A pointer is worked under the value outline as a moving normal, which moves into a field isolated down the middle by a flat zero level. Most of the signals concern the crossing of the zero lines.

The main signals of the RoC indicator

•             When the zero lines are crossed from bottom to top – a buy signal, when from top to bottom – to sell.

•             Divergence – when the price and the chart go in opposite directions, there is a possibility of a trend change.

•             On the indicator chart, you can draw support/resistance lines and perceive rebounds from powerful lines as strong signals. If levels and lines are used in the indicator field, it becomes more important and signals can be used to enter the market.

Accurate indicator ahead of% R Williams

Larry Williams created the Williams% R Oscillator in 1973. This tool, like all accurate Forex indicators, can determine the state of overbought / oversold by the location of the current closing price in relation to the range between the minimum / maximum prices for previous periods. Trading with this indicator is simple: a buy signal appears when it is oversold (% R is in the range of -80% and below), and a sell signal appears when it is overbought (% R is in the range of -20% and above).

To calculate the indicator, the difference between the maximum value and the close price for a certain period is divided by the difference between the high/low prices for this period. The default period is 14.

Formula for calculation: R% = – ((H – C) / (H – L)) x 100 , here:

•             C is the last closing cost;

•             L – minimum price for the period;

•             H is the maximum price for the period.

Williams Percentage Range provides an opportunity to see overbought/oversold conditions, but it is best to use other Forex indicators together with it for general trend analysis.

Williams% R signals

•      The pointer goes above – 20 – conceivable overbought.

•             Indicator below -80 – possible oversold.

•             The indicator crosses the boundaries of the overbought area from top to bottom – a sell signal.

•             The indicator crosses the borders of the oversold zone in the upward direction – a buy signal.

•             Weakness of an uptrend – when the price rises to a maximum and the indicator does not support such a movement.

•             Weakness of a downtrend – the price falls to the next low, and the indicator shows different values.

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What are hotkeys in trading?

Hotkeys make your work faster. A trader wants to improve the speed in his work. So read about these hotkeys and also use them for trading. These hotkeys will help you in speed improvement.

I started trading regularly two months ago. I practice day trading with scalping elements. You almost always have to act quickly.

During this time, there were almost no days that I did not make at least one mistake when placing an order to enter or exit a position.

Fat finger stalked me almost every trading session. Of course, it’s all about the proper skill and hard work during demo training.

The longer you hone your mastery of the execution keys, the better. But the key layout itself plays an important part. It should be convenient, fully meet the assigned tasks, and correspond to the trading style.

American Traders use these hotkeys in trading.

  • Set the option to buy order on the key combination Shift + Q.
  • Set the option to sell order on the key combination Shift + P.

Pressing the above combinations again will allow you to change the ECN to open a trade position.

  • Set the Sweep purchase option to the Shift + R key combination .
  • Set the Sweep sell option to the Shift + U key combination .

Indeed, these functions will be very useful. A swip order involves placing a trader’s order with a small margin in a few minimal steps. One step is measured in pips. The stock is regulated directly by the trader.

In some ways, these functions resemble a limit order, except that there are a little more pips. It is especially relevant when a trader loses the opportunity to place automatic stop orders.

  • On the key combination Shift + S, set the Limit purchase option.
  • Set the Limit sell option to the Shift + L key combination .

By and large, these functions are familiar limit orders, with the only difference being the automatic setting of the size for an open deal.

  • Set the Stop purchase option to the Shift + V key combination .
  • Set the Stop sell option to the Shift + N key combination .

By analogy with the previous functions: repeated presses will allow you to change the ECN by the minimum step.

Additional functions:

  • On the key combination Shift + [ set the option for adding alerts.
  • On the key combination Shift +] set the option to open the alert panel.
  • Set the option to change the cost to five points on the Shift + arrow keys combination.
  • On the Delete key, set the option to cancel the first limit order in the section of unexecuted trading operations.
  • On the Space key, set the option to switch between the second level and the window with unexecuted deals.
  • On the arrows, set the change in value by 1 point.
  • Set the option for choosing the number of lots on the NumLock key.

The only uncovered moments are market coverage, that is, buttons for emergency closing of trading at any cost.

The fact is that the employees of this company simply do not use this option, since they are professionals, therefore, do not lose money on rebates.

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What Are The Day Trading Computer Requirements?

You can never win day trading unless you meet day trading computer requirements. A professional trader use and also earns a lot of profit from it.

So here I will explain to you complete detail about day trading computer requirements. 

Most traders recommend these computer requirements for trading.

CPU Components

  1. High Speed Tower CPU 
  2. SSD (Solid State Drive)
  3. CPU Cooler
  4.  RAM
  5. Processor
  6. Graphics Card

High Speed Tower CPU for Trading

There is a risk of making mistakes at the first stage of selecting a CPU trading computer requirements.

It’s hard to say that ACER is better than LENOVO and ASUS is superior to HP.

It is not the brands themselves that should be analyzed, but specific device models.

Then you can accurately determine the advantages, disadvantages, and draw adequate conclusions.

If you are confused about choosing a CPU.which one is the best for you?

So I recommend you to choose from HP or Dell. These are the best and not too expensive.

SSD (Solid State Drive) for Day Trading Computers

When I start talking about SSD Drive That time I remember the question of a person. Why we need SSD for day trading computer requirements?

So I answer you here. If you are thinking about purchasing an SSD, but are wondering what advantages you will get when switching from a conventional HDD, then here are some of them:

– Increasing the speed of work – loading the operating system, launching applications, working with large amounts of data or loading levels in games – such tasks are rather accelerated by installing an SSD;

– Greater reliability – the absence of moving parts is conducive to this;

– Increase in the speed of reading/writing files – the speed characteristics of SSD are superior to those of HDD;

– Noiselessness – since ordinary microcircuits act as an information storage device.

Thanks to this, it is possible to assemble completely silent system units, including extremely compact ones;

– Smaller dimensions and weight.

CPU Cooler

When the processor overclocked, the TDP increases, and the increase can be up to 100%.

Therefore, if you are going to overclock the CPU, then it is worth purchasing a cooler with increased power dissipation.

Base material

This parameter is vital for compact coolers that do not have heat pipes.

Copper has a thermal conductivity of 1.6 times higher than aluminum.

Therefore, a copper base in a budget cooler will give a good increase in cooling compared to all-aluminum models.

Design

Modern coolers can be divide into three types of designs.

The simplest one is an analog of a boxed cooler – the one that comes with the processor. 

Random-access memory (RAM) is a necessary element in the operation of a computer, which is responsible for memorizing and storing temporary information needful for the processor to carry out various functioning.

Day Trading Computer RAM

RAM is a volatile element that ensures the safety of data until the computer is turned off.

RAM requests the desired cell directly, without using other blocks.

In the colloquial jargon of various computer systems specialists, RAM is straightforwardly called “RAM.”

A little about the principles of RAM. Some computer has both RAM and ROM, that is, read-only memory, which is a hard drive.

It is also a volatile type of memory, but unlike RAM, it stores all information even after the PC is turned off and there is no power.

The central processing unit uses data from the hard disk to perform its assigned tasks.

This information is duplicated from ROM into a kind of “buffer,” which is the random access memory.

After changing the data and saving it on the hard disk, the RAM is cleared.

Information in RAM is needed for the functioning of other computer devices, such as a video card.

Since RAM increases the speed of exchange processes between the CPU and the hard disk, the larger it is, the higher the performance of your PC.

8GB to 16 GB RAM is enough for a day trading computer.

A Day Trading Computer Processor

The processor is the supreme component of day trading computer requirements.

It is a small piece of silicon, that performs all the complex tasks that you put in front of your computer.

This is where the operating system runs as well as all programs. 

The processor manages the complete data in your computer and executes millions of instructions every second.

And the processor is a small silicon chip that performs all the operations and functions of a computer. For best performance.

For the minimum specifications, I recommend you a Quad-Core 2.8GHz. At least a Quad-Core 3.6 GHz is preferable.

Best Graphics Card for Trading Computers

A Graphics card is an expensive component of the trader computer.

Different brands of Graphics cards available in the market. You can choose anyone’s graphic card for your day trading computer.

The main purpose of a Graphics Card in a trading computer is to show you the graphs clearly on your monitor screen.

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