forex trading how to use of indicators?

Answer 1

For Forex i wouldn't be too concerned with fundamentals since they're too volatile to be reliable. Factors influencing the exchange rate and how they inter react are too complex even for brokers and bankers. Just when you think you figured out fundamental indicators the rules change. What i would consider "workable" is the cost of money, in other words interest rates.

The solution is technical analysis and the ultimate indicator is price itself. The logic is simple, 1) you have to find the direction: is price range bound or trending? Even a child can see that. 2) where does price bounce off? From resistance and support lines provided by moving averages, pivot points, fibonacci, boll. bands. You do have to know how to use these, some are made for trending markets and others for rangebound markets. 3) where to enter or find a reversal? Reversal or entry signals are derived from candlepatterns and the more popular oscillators such as stochastics, but like with all other indicators you use the ones that work for you, the ones you feel comfortable with....

You only need two or three signals, use more and you end up being confused. So the rules are find the direction, find a support/resistance level and find the reversal/retracement. thats all there's to it. There is no indicator out there that will make you bundles of money each and every time so you need a money management plan in order for the winnings to outweigh the losses. A good and simple risk/reward ratio is 1:2, for example for every 15 pips loss you risk you try to gain 30 pips.

An example trade is when the exchange rate is trending up you might want to use 20, 50 and 200 EMA is a means of finding a support level, and a popular candle pattern as an entry.

This is the basic strategy, however don't stop yourself from developing and experimenting yourself with your own logic and personality. It doesn't mean because you're doing what others do that you'll be armed with the best trading system. There are many profitable strategies and its up to you to find one that suits you best.

the most popular indicators are: pivot points, fibonacci, MACD, stochastics, moving averages, RSI, boll.bands, candle patterns and ofcourse handdrawn support and resistance lines...

You also need to be aware that the larger the timeframe the more reliable signals are. The absolute minimum is a one hour chart. If daytrading with a 5 min or 15 min chart is your thing then be sure to watch a larger timeframe first....

successful trading often means leaving out what doesn't work....so its no use adding one indicator after another on the charts..

Technical analysis works because its extremely popular..

Answer 2

Hi there,
If you dont have previous experience trading in the Forex market I would not suggest you spend countless hours trying to read graphs and study charts. Learning all the technical aspects of the Forex market can be very difficult and most people end up loosing all their money within the first 60 days. If your looking for a trading system that does 95% of the work for you and takes the guesswork out of trading on the market I would suggest you take a look at www.smartforexinvestor.com. If you would like to see some real results using the system just email me or give me a call and I would be more than happy to share my transaction report with you. Any questions just let me know.

Best Regards,

Yo Fujikawa
1-800-670-2683

Answer 3

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