Faithful friends of the trader when making money on financial markets there are indicators - specially designed analysis tools that automate the process of searching for certain recurring patterns on the chart. The use of these assistants is mostly based on the ideas of technical analysis. Therefore, every novice trader should, at the beginning of his journey, learn some important points about what technical indicators for Forex are, what they are and how to use them correctly.

The history of the birth of technical analysis

You can often hear opinions that technical analysis is a young science. In fact, this is a serious misconception, since the roots of the technical approach are rooted in hoary antiquity. For example, Joseph Vega, back in the 17th century Dutch stock exchange, was looking for patterns in price movement, and in Japan, rice traders developed the basics of a candlestick strategy, which today is actively used by all followers of technical analysis in Forex, binary options, stock exchanges, etc.

However, in the modern interpretation, the founder of technical analysis is Charles Dow, who developed the theory of searching for price patterns in the 1920s, which formed the basis of the works of Ralph Nelson, William Gan, Richard Wyckoff, and others. Each of these luminaries contributed to the formation and development technical analysis.

Subsequently, the works of these analysts were finalized, and by 1950, J. Magee and Rob Edwards had written a book that embodied all the most successful developments in the field of technical analysis. It was called "Technical Analysis of Stock Market Trends".

In the future, with the advent of computers and the active development of Internet trading, technical analysis simply flourished - new types of charts, a large number of indicators, etc. over 800 pages of theoretical material and graphs with explanatory examples.

Technical indicators to look for patterns

Applying technical analysis, a trader will definitely use Forex technical indicators to implement a particular strategy. Like the figures of graphical analysis, there are a lot of such tools, but among them there are those that have already become classics, and therefore the methods embedded in them can be found in the work of other tools. Therefore, below it is worth briefly considering such basic technical analysis tools.

Determining the trend with the "Moving Average"

As the first indicator, which probably brought the most money to traders around the world, is considered. We are talking about moving averages (English moving average or abbreviated MA), the algorithm of which adds prices in separate periods and divides the resulting figure by the number of such periods. Simply put, MA finds the arithmetic mean and uses it to display the smoothing line price on the chart.

Here is an example of a 20-period MA on the AUD/USD weekly chart, where candle closing prices are used for smoothing. Thanks to this, market noise and random impulses are cut off, and the trader sees exactly where the price is more likely to move.

If the candles are above the MA line, then it is considered that the trend is up, and prices are likely to continue rising. If the candles are below the MA line, then this is a signal that the fall may continue.

Depending on what price values ​​are taken to build a moving average (opening, closing, averages) and what method is used to obtain average values, there are several types of Moving Average:

• Simple MA (SMA) - simple;
• Exponential MA (EMA) - exponential;
• Weighted MA (WMA) - weighted.

These designations are worth remembering, since one of the above abbreviations can be used when describing strategies. Despite the different types of moving averages, there is no particular difference between them, especially if you take them with a rather large period for a chart with a large timeframe.

Here, for example, is what a 4-hour EUR/USD chart looks like with 3 moving averages added to it with a period of 50.

Application of moving averages on the chart

You can use moving averages for the following purposes:

• when determining the trend;
• when the trend changes;
• as a support/resistance level.

In the screenshot below, you can see how the moving average simultaneously showed that the trend is down, and also gave good entry points along the trend when the price rolled back and approached the MA line, which acts as resistance in a downtrend.

Usually, traders use not one moving average, but several. One is taken fast (with a short period), and the second is slow (with a longer period).

This allows us to draw the following conclusions:

• as long as the fast MA stays above the upper one, the uptrend is preserved;
• if the fast MA is under the slow one, the downtrend is preserved;
• moving averages cross - a sign of a trend change.

The main problem when using moving averages is sideways, during which Forex trend technical indicators give a lot of false signals.

Accumulation & Distribution (A/D)

A popular tool that compares price changes and trading volume. The effective use of this instrument is allowed only on those instruments for which the real market volume is known. Therefore, you should not use it for currency pairs.

But if Forex technical indicators are used to make money on stocks, stock indices or futures, then A/D becomes an extremely useful analysis tool.

Its purpose is to determine the current trend and herald its reversal. The indicator is displayed in a separate window, where the growth of its signal line indicates a stable trend development. When the signal line rises far up, it is worth waiting for a market reversal, which you can enter after a small flat trend, where prices are consolidating.

Average Directional Index (ADX)

This indicator is designed to show the strength of the current trend, thanks to which the trader always knows exactly whether to open new transactions in the direction of the current trend or not. ADX is displayed in a new window, where you should pay attention to its three signal lines DI+ (green), DI- (red) and ADX (blue).

If DI+ is higher than DI-, then you can buy binary options “Higher”, and if vice versa, then “Lower”. At the same time, it is worth watching the blue ADX line. If it rises, then the strength of the current trend, whatever it may be, is growing.

Aroon indicator

Another very interesting technical indicator for Forex is called Aroon. It is used to determine the direction of the current trend and its strength. That is, it is similar to ADX, but uses a slightly different calculation algorithm.

The indicator constantly compares the peaks, displaying their change in the form of two lines - blue and orange. The first of them shows how much time has passed since the price updated local highs. The second one does the same, but for the minimums.

The most effective way to use the indicator is to find points of trend change. For example, in the screenshot below, you can see that the intersection of the blue and orange lines indicated a change in the downward trend to an upward one.

MACD Oscillator

A very interesting oscillator is the MACD, which is widely used in financial markets. This indicator equally well gives signals in the direction of the trend and very accurately portends reversals when a divergence forms in the market.

The simplest and most effective signal will be the intersection of the signal lines of the indicator.

RSI Oscillator

Another very useful oscillator is the RSI, which uses a slightly different principle. This analysis tool analyzes excessive price deviation when quotes are no longer trading heavily, which heralds momentum fading and reversal.

Such areas are quite easy to visually identify. You just need to follow the RSI signal line, which is moving in a separate window. If it rises far up, then this means that the price is overbought and it is important to open short positions, counting on a reversal and a fall in prices.

If the signal line, on the contrary, has fallen very low, then they say that the price is in the oversold area, and therefore purchases are relevant.

On Balance Volume or OBV

The OBV trend indicator uses preliminary analysis to generate signals trading volumes, which are compared with the direction of price movement. The principle of operation of On Balance Volume is as simple as it is effective. If prices rise, then the indicator assigns a positive value to the traded volumes, but if they fall, then, accordingly, a negative one.

The trader only needs to follow the OBV signal line. Its growth makes it relevant to buy contracts to increase the price, and a downward movement allows you to play for a fall.

Stochastic Oscillator

The Stochastic Oscillator can easily claim to be the most widely used indicator in the world. It is similar to the already considered RSI, since it also belongs to a subspecies of oscillators that determine the overbought and oversold prices.

To determine a critical price deviation, the indicator measures the strength of the momentum, and a trader can trade market reversals using signal line intersections in overbought / oversold areas and identify divergences (divergences) when the price on the chart does one thing and the oscillator lines do another.

The screenshot above shows that on the chart the price has drawn two successively lowering lows, while the signal lines have drawn two lows corresponding to them, where the second is not lower than the first, but, on the contrary, is higher. That is, there is a discrepancy between the price and the Stochastic, which always acts as a harbinger of a reversal.

Volume Indicators

IN technical analysis there is a separate branch that deals with the study of trading volumes and their impact on the markets. For the first time, the importance of volumetric analysis was noticed and described by Richard Wyckoff, whose ideas became the basis of VSA. Analysis-based trading techniques rely in their judgments on the fact that a major player always leaves a mark on the market, since he, due to the structure of the market, cannot simply enter or exit a position. Therefore, a trader who monitors volumes can always notice the attempts of a market maker to perform some actions on the market, after which it remains just to repeat them and earn.

However, it is extremely difficult to effectively apply Forex volumes when analyzing currency pairs, because the foreign exchange market has a decentralized structure, and therefore it is impossible to summarize statistics and determine the exact trading volume that has passed over a period of time.

However, many brokers understand how important it is to consider volume data when trading. Therefore, they provide data about them within their system. For example, a large Forex broker Oanda provides such histograms showing how his clients are trading.

For example, in the following screenshot, placed limit orders (left column) and held open positions(right column). By the ratio of open buy and sell orders, as well as by identifying significant price levels where a lot of pending orders have accumulated, you can improve the accuracy of your analysis.

In addition, real volumes can be tracked through the futures markets. For example, currency futures are actively traded on the Chicago Mercantile Exchange (CME), which regularly publishes data on trading volumes on its website.

But it is not very convenient to watch reports there, so you can use web services that provide data on futures (ClusterDelta, TreadingView), or install one of the terminals for trading futures contracts: Ninja Trading, Thinkorswim, ATAS, MultiCharts, etc. By the way, on ClusterDelta website has paid technical indicators for Forex, which broadcast volumes on currency futures from real trading platforms directly to the MetaTrader4 trading terminal.

It is important to understand that Forex technical indicators are different. Therefore, it is desirable to combine them with each other so that they level out the shortcomings of each other. For example, you can take one indicator from the trend group to determine the trend, supplementing it with a tool for tracking the strength of the current movement and an oscillator to see where the price enters the overbought or oversold area.

For example, you can use a combination of moving average, ADX and, for example, Stochastic. The final choice of indicators depends on the trader himself, but you should not put instruments from the same group on the chart. In addition, you should not get too carried away by adding indicators, so as not to get such a picture, where even the price itself is not visible behind the analysis tools.

Important quotes on technical analysis

Having studied an introductory course on technical indicators for Forex, a trader should understand the following for himself:

1. The price contains everything you need to predict it.
2. There are patterns in the market, and they work well, as history tends to repeat itself.
3. For the effective use of technical indicators in Forex, you need to control the release of important news.
4. The price always moves within one of 3 trends: uptrend, downtrend or sideways.
5. Before trading, you should always plot trend lines, price channels, and support/resistance levels on the chart.
6. Volume analysis tools cannot be applied to Forex currency market instruments, since it is simply impossible to get them on a decentralized spot.
7. For work, you should choose a candlestick or bar chart.
8. A trader must know all the main reversal and trend continuation patterns, as they are often found on all charts.
9. Moving average - the simplest trend indicator, which eliminates market noise and determines the current direction of the trend.
10. To determine the strength of the trend, as well as critical price deviations, you need to use one of the following tools: MACD, A/D, RSI, ADX, OBV, Stochastic and Aroon.

Outcome of review of technical assistants

Knowing now the main technical indicators for Forex, a trader should start mastering and applying them, not forgetting common sense. It is not worth experimenting at the beginning of the journey on small time intervals, where the accuracy of the signals decreases due to the influence of market noise, and, of course, you should not clutter up the chart with all the different indicators, making it impossible to track the price.

Forex technical indicator is a mathematically calculated transformation of price and volume financial instrument collectively or separately, which is able to predict future price changes.

The Forex indicator gives the trader the opportunity to make the right decision regarding the timely entry and exit of the market, as well as which position is more appropriate to open in order to make a profit on Forex.

The indicator for MT4 "FOREX PARADISE" is a high accuracy indicator - a personal indicator from Guru Trading, which allows you to consistently and safely earn hundreds of points without the use of Martingale and high-risk trading methods.

The indicator was developed for 70 currency pairs on Binary Options and Forex and is guaranteed to give more than 87% of accurate entries, you can use it with any broker with the MetaTrader platform.

"Trend4you" trend indicator shows a forecast of the possible trend direction, based on the analysis of the trend strength on all timeframes. The indicator reflects data on the following time frames M1, M5, M15, M30, H1, H4, D1, W1, MN.

The 10 columns represent the last 10 bars of each timeframe period. The color bar indicates its type - the red arrow is "bearish", the green arrow is "bullish" and the yellow dot is the neutral position of the trend. The right column with a checkmark contains a summary of the trend direction assessment. You should open trades in the direction of the main trend following the results of the first column. Starting from the lowest column from 0 to 9, a change in value signals a change in trend.

Works on all currency pairs. Well suited for manual intraday trading and scalping on the signals of the smallest timeframes. It has a very fast response to a trend change. Easy and intuitive to make trading decisions.

The main feature of this news indicator is that it can be used in almost any Expert Advisor to enable or disable trading (or any other actions) during the news release.

It can also be used as a regular indicator showing news releases.

Everything is visible and clear on the chart, a very convenient and useful indicator.

The indicator has many different settings. Such as the color and type of indicator lines, allows you to display only future events, has filters by the importance of news, as well as on / off sound signal about upcoming news.

1. AutoDetectPairs (true/false). If set to true, the virtual trade monitor will check if your broker supports the original set of currency pairs or an alternate one and selects the appropriate one. If set to false, it will use alternate pairs (IBFX), but these can be overwritten by "Custom Sell Pairs" and "Custom Buy Pairs". What pairs are currently in use are shown in parentheses on the line below the "Virtual Trade Monitor" (near the upper right corner of the chart)
2. ShowJumps (true/false). If set to true, links will be shown visually as lines and arrows. This may be one of the most important features virtual trade monitor as it shows how the pairs move after the jump!
3. DisplayJumpInfo (true/false). If set to true the virtual trade monitor will show below the sell/buy pair amounts with additional information about the last transition. Especially after the jump time has passed (eg if you don't sit in front of your computer all the time). Combined with the ShowJumps parameter, this is a good tool for controlling the movement of couple jumps.
4. ShowJumpAlert (true/false). If set to true, you will be informed of each jump via an alert box (with sound).
5. ShowBaskedBackground (true/false). If set to true, the cart indicator background will be colored red (sell pairs) and green (buy pairs). This simply gives a better visual impression and makes it easier to differentiate between the top "sell zone" and the smaller "buy zone". You can of course set it to false to turn off the background fill.
6. Custom pairs sell and buy custom pairs can only be used if AutoDetectPairs is set to false! The default is an alternate set of pairs, but you can put in your own pairs of course.

High profit professional indicator for Forex.

It is used in conjunction with indicators that determine the flat.

This is a powerful weapon against losing trades.

The indicator simultaneously analyzes prices on all timeframes and gives a clear direction of price movement.

Very convenient and useful in work.

Currently, the FOREX market mainly works with four currencies: the Japanese yen, the Swiss franc, the British pound and the euro. Pallada is a trading system for MetaTrader 4, designed for trading both long-term intraday trends and intra-session movements in the EUR/USD, USD/JPY, USD/CHF, EUR/JPY, CHF/JPY markets, at the request of the client, the TS can be configured and for other couples.

Xprofuter is one of the most innovative indicators on the Forex market. It displays the movement of the price chart 12 bars ahead. The accuracy with which the indicator determines the further movement is approximately 90%. But it does not give great advantages in work, but only suggests further price movement and what it will be.

How to trade with iPanel_Indicators.ex4

The iPanel indicator scans signals from multiple Forex indicators on multiple timeframes and turns everything neatly displays on the screen in the form of up and down arrows. Up - buy, down arrow - sell.
The info box can be moved to any of the 4 corners of the chart by changing the value of the "Corner" parameter from 1 to 2, 3 or 4.

What indicators do traders monitor with iPanel?

Stochastic 8, 3, 3 - iPanel shows position 2 Stochastic lines %K and %D (in the screenshot above they will correspond to %K - red and %D - blue).
When red is above blue - iPanel will show a red arrow, sell.
When red is below blue - green arrow, buy.

RSI 14 - When RSI is above 50 it will be an uptrend and a green up arrow, RSI below 50 is a downtrend and red arrows on the iPanel down.

CCI- (Settings for CCI unknown, unfortunately it could be 14 or 20 for sure.
In any case, this does not prevent us from simply reading the CCI signals on the iPanel: green up arrow - buy. Red down arrow - sell.

On iPanel, CCI has a special status - it's an extra set of arrows. These arrows have the following meaning:
Slanted Up Arrow (Green) - CCI is struggling to sell.
Slanted down arrow (red) - CCI is against buying.

MACD 12, 24, 6 - remember that you can change the indicator settings, in the screenshot MACD has standard settings 12, 26, 9.

When the MACD histogram is above zero and the MACD signal line hovers above the histogram - Sell.
When the MACD histogram is above zero and the MACD signal line is a trade inside the histogram - buy.

In this section you can download Forex indicators for free. Despite the fact that there are Forex strategies without indicators, indicator strategies are a simpler and more affordable means of market analysis (especially for novice traders). In addition, for example, Forex trend indicators can be an excellent addition to strategies based on price action patterns. The description of Forex indicators is made as brief as possible so that the trader can quickly decide on the need to use each particular indicator in his trading. To use some special indicators or limit yourself to classic ones, such as, for example, the Forex RSI indicator, is a personal matter for each trader. Remember: any indicator must be carefully selected for each specific trading system or strategy. Many people mistakenly believe that there are profitable Forex indicators and not profitable ones, but this is not so. Any, even the simplest indicator, such as the Forex channel indicator, allows you to build a profitable trading system. And on the contrary, even the most expensive and sophisticated will not give anything but losses if used incorrectly. Keep this in mind, please, when choosing a Forex MT4 indicator to use in your trading system.

It is important to understand that there are a huge number of Forex indicators now, these are standard, modified, and author's.

How to choose forex indicator among a wide range?

1. Remember, there are many indicators, but you do not need to use all at once, stop choosing only a few;
2. As a Forex trader, don't waste your money on paid indicators. Use those that are in your arsenal trading terminal default;
3. When choosing indicators, be guided by the fact that these indicators provide various information about the state of the foreign exchange market. Do not use the same type of Forex indicators.
4. It should be noted that in accordance with the functional properties of indicators can be divided into two groups: trend indicators and oscillators.
   1. Trend indicators help to highlight the price movement in one direction and determine the moments of trend reversal synchronously or with a delay.
   2. Oscillators allow you to determine turning points ahead of time or synchronously. For instance, Forex volatility indicators like RVI, CCI, RSI and others.
5. Check the identity of the indicators. We can safely say that using the Stochastic Oscillator, Momentum and RSI indicators at the same time, you will probably get almost identical data, but using a different set of MACD, Volume and RSI is a comprehensive analysis of the market condition, since these indicators provide data from different points of view.

It is important to understand that the choice of an indicator is only half the battle, it is still necessary to set it up correctly. You choose the settings of the technical indicator yourself, taking into account the trading pair, timeframe, etc.

For optimal settings of the Forex indicator, you should:

• understand what the indicator should show (trend strength, direction, support/resistance levels, divergence);
• select the timeframe on which the indicator will be used;
• look at the history of the indicator, understand the patterns of work;
• understand what signals the indicator gives, they can be lagging or leading;
• select the indicator parameters, focusing on the optimal quality of the signals;
• be sure to test the indicator on a practice account or on a micro account.

By choosing your indicator, as well as setting it up correctly, you greatly simplify your trading on foreign exchange market Forex. This greatly simplifies the analysis of market movements and forecasting future price movements, allows you to make more exact inputs to the market. And this leads to maximum profit. In this section, we will continue to collect the best new Forex indicators of 2017.

It is possible to get a stable profit from trading on the Forex market only if the trader opens orders with “knowledge of the matter”. If you enter the market randomly, then the profit will depend solely on the combination of circumstances.

To increase the efficiency of trading, it is worth understanding What are the best indicators to use in Forex?. With their help, the trader assesses the situation on the market and decides whether to open a deal or whether to wait.

Types of indicators used in Forex

Despite the differences in the algorithm of work, all indicators are conditionally divided into groups. The belonging of a particular tool to a certain category does not mean at all that different algorithms cannot be used simultaneously. They are combined in any combination, everything here depends only on the preferences of the trader.

Main groups of indicators:

• Trendy. They show the presence of a certain price movement. Prominent representatives of this group are, for example, Moving Average (MA), Bollinger Bands, Parabolic SAR , CCI, Alligator;
• Oscillators. Display the strength of the trend. Typical representatives of the category are RSI, Stochastic, MACD, Momentum, Ichimoku;
• Psychological (tools of volumes). The most complex programs in their algorithm. They are usually absent in the standard set of the terminal. Examples include the Chaikin or Caiman indicator.

Sometimes there are instruments that display volatility, but they all work on the basis of mathematical calculations using formulas.

Some tools require a history for a certain period to work correctly, so in case of a new installation of the terminal, you will need to manually download it or wait for it to happen automatically.

Bollinger Bands

If the question of which indicators are better to use on Forex is one of the most exciting for a beginner, then experienced traders are often limited to the standard set supplied with the MT4 terminal.

One of the most popular indicators is Bollinger Bands or BB. It is placed directly on the chart, preferably switched to display Japanese candlesticks. Its work is based on a simple moving average and two lines displayed in parallel, with shift periods set in the settings.

With the help of BB, traders determine:

• Decrease or increase in volatility. This is indicated by narrowing and widening of the extreme lines;
• Trend direction. If the lines are pointing up, this is an uptrend, if these bands are pointing down, then this indicates a downtrend.

If only this "turkey" is used in trading, then the order is usually opened at the moment of the breakdown of one of the extreme lines. When a new candle appears above the upper band, a buy trade (BUY) should be entered into, and if the lower band is broken, a sell trade (SELL) should be entered into.

RSI

The RSI indicator or Relative Strength Index (relative strength index) is used to determine overbought and oversold levels (). For ease of display, it is fixed not on the chart itself, but below.

In practice, this algorithm is often used in conjunction with other tools, but even in the singular, you can get good signals from it. Standard variant application of RSI looks like that:

• If the curved line crossed the horizontal band with a value of 70 from the bottom upwards, then you need to wait for the moment of the reverse intersection and open a sell position (SELL);
• After crossing the line with a value of 30 from top to bottom, you should expect a reverse "signal" and at this moment make a deal to buy (BUY).

Traders who prefer aggressive trading use even the first crossing as a signal to enter the market. But it should be borne in mind that the movement in the direction of the “breakout” is usually short-lived, so you can only count on a small number of points.

Combination of indicators for use in Forex

Traders often use several technical instruments at once, which allows them to weed out false signals and increase the percentage of profitable trades. By the way, you don’t have to look for rare specimens on the Web, but you can get by with only algorithms from the standard set of the MT4 terminal.

One of the options for such a combination is RSI + BB. To start using such a “home-made” combination, you first need to put RSI on the chart, followed by Bollinger Bands. We recommend choosing the Previous Indicator’s Data mode, otherwise it will be automatically displayed on the chart.

Due to the combination of the lines of the two indicators, we have a much larger number of signals to open positions, because it can take a long time to wait for the moment of breaking through the RSI lines at values ​​of 30 or 70. During this time the price currency pair is able to pass about 200-300 points on the 4th sign, which actually means a lot of lost profits.

The trading system based on the given complex looks like this:

• Crossing the upper band of the instrument BB curve from RSI from top to bottom signals the possibility of concluding a deal to sell;
• The breakdown of the lower line BB from the bottom up means that it is time to open in the direction of purchases.

The above example is good for conservative trading when the current trend is most likely to continue for a long time. If you choose to trade more aggressively, a trader can enter the market at almost every intersection, including the central moving indicator of the Bollinger Bands.

This approach is considered much more risky, but it allows you to earn much more profit if the trader chooses really good moments.

In addition, BB allows you to determine the flat or the period of the emergence of a new trend. The narrowing of the lines indicates a decrease in volatility, and at the same time an increased risk of entering the market due to too “short” price movements. The extension allows you to judge high volatility when a successful entry will bring profit to the trader.

Forex indicators are an important analysis tool in the work of a trader, which is indispensable in predicting price fluctuations. Experienced traders use a large number of indicators to obtain more accurate data for entering the market. The Forex technical indicator helps in making a correct forecast of the behavior of the prices of currencies or other trading instruments for a certain period of time.

As you know, the market can be in two states, such as a trend or a flat. In this regard, according to the functionality, technical indicators on Forex are conditionally divided into two types:

• Trend indicators (trend indicators), indicating the presence of a direction, which can be downward or upward;
• Oscillators (leading indicators) that show price deviations from its average value and give an entry signal based on the overbought and oversold status of the instrument. They are used in a stationary state of the market, and they also help determine the moment of a trend reversal.

Also, psychological indicators for forex, which determine the mood of market participants, are divided into a separate group. In this section, we have collected the most popular and effective Forex indicators for MetaTrader 4 and MetaTrader 5. We are constantly expanding the line of forex indicators for traders, each indicator contains detailed description and is available for download free of charge for all LiteForex clients.