Whoever is in the business forex would have asked the question above. "Are there any indicators that really powerful in predicting price movements?" And I'm sure, you too have spent much time looking and researching to find answers to these questions. Should an expert seismograph, he could see circumstances / status of the volcano is only from the graph and even able to accurately predict when the volcano will erupt. So, should you also can find out the market situation and predict the direction of price movement, also only from the graph. Is not it? Forex articles I will try this time peek what actually powerful indicators in detecting the direction of the market.
Well, let's get started ...
Basically, all the existing forex indicators are very adequate in predicting price movements. Only sometimes, you do not know when an indicator is used. I mean, one particular indicator has a different function with the other indicators. For example, if you are forced to use diversified trend following indicators on the market is ranging then you will not get accurate signals so you can even be trapped. Conversely, if you use oscillator indicators during the market is trending course also will provide similar results. I have a few useful tips how to use appropriate indicators. Please review the following:
1. Know your market situation. This absolutely must be done before you select an indicator. I am sure you are very aware that not all indicators can be applied to any type of market. You must have read in my forex tutorials that when the market is trending should traders use trend following indicators, was at the time was ranging market, traders must use the oscillator indicators. Please read if you forget to reset it.
2. Customize Your Trading Technique. You choose trading techniques "breakout system" or "pullback system". Both of these techniques can be applied in the current market trending or ranging. But you should note that the technical breakout system will be less good if you use oscilator indicators. Alternatively use the indicator as a trend line or moving average. As far as I watched indicators such as the awesome oscilator oscillator, RSI, and other really good if used for pullback technique. You can combine them with moving averages and Fibonacci formula only if the market is trending conditions.
3. Indicators Sinergikan you. Whatever your favorite indicators, he can not be alone. Trading signal will be much more accurate if you combine it with other indicators. To note the synergy of this indicator is that both should be mutually supportive. It's easy, do not combine two or more indicators of the different functions and usefulness. If you do so, believe me you will be confused because the trading signals generated inconsistently. Take, for example, put oscilator stochastic indicator and moving averages in your metatrader chart. See when the moving average leads upwards (up trend signal - open buy), but the stochastic is sometimes indicate overbought conditions (above level 80). You dare to buy? I am sure you will be in doubt, do not you?
Well, I hope these three simple tips can be useful. The need to always remember is that forex is not exact so you will not find a magic formula that can be properly applied mathematics. Not applicable rules if this is so. Forex is more appropriate to be addressed as an art, the art of probability. Whatever indicator you choose and the strategies or techniques that you apply, it belongs to the question how many percent probability level. Although this is also what percentage can not be measured quantitatively, but the way the proper selection of indicators will be able to increase your probability level qualitatively. How do you think?
translated from http://www.andrewijaya.com/index.php/2009/03/04/indikator-forex-yang-paling-ampuh-adakah/ # more-149
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