Indicators are often considered a blessing for novice traders. If you can learn the proper use of an indicator, you can easily filter out the best trades and execute trades with an extreme level of precision. Sadly, the novice traders are always making mistake while using the indicators. They simply overload their trading charts and make things complex. The Forex trading business is extremely simple. If you know the proper way to trade the market, you will never have to worry about your financial condition. Just stick to your trading strategy and wait for the best trades.
Though indicators are one of the most effective ways to find great trades, very few traders know their actual use. Today we are going to discuss three power indicators in the Forex market. If you can use them properly, we can assure, there will be a significant improvement to your trading performance.
In order to find the overbought and oversold conditions of any currency pair, the experienced traders use the stochastic indicators. There are two major readings in these indicators. If the value of the stochastic indicators lies near the 20 marks, it represents the oversold condition of the market. This indicates the trades about the potential bullish reversal. On the contrary, if the reading stays near the 80 mark, the chances are very high that the market will exhibit bearish movement. While using the stochastic indicators, make sure you are not using it in the lower time frame. Try to use it in the higher time frame since it will generate better results.
Stochastic is a leading indicator. If you intend to use the indicators reading, make sure you have access to a premium trading platform. You can’t find the perfect reading of the indicators by trading the market with the low-end broker. For this reason, the smart traders in Singapore prefer to trade the market with brokers like Saxo. Since you will be dealing with the indicators to find good trade setups, you must choose your broker very carefully. Never think the low-end broker will give you perfect data to find the good trades. Just open a demo account with a high-end broker and you will feel the difference between a professional and average class trading platform.
RSI stands for relative strength index. This indicator is widely used by professional Singaporean traders. If the reading of the RSI indicators stays near the 70 mark, look for a selling opportunity. Similarly, if it stays near the 30 mark, you need to look for a buying opportunity. Just by using this simple principle you can easily execute high-quality trades at any market condition. The best thing about the RSI indicator is the lagging features. This means you will always have late signals which will save you from losing many trades.
Simple moving average
The simple moving average often known as SMA is extremely popular among the professional traders in Singapore. When you use the simple moving average, make sure you are executing the trades with simple logic. New traders might not understand the optimum value for these indicators but there is nothing to worry. You should use the 100 or 200 SMA to get quality signals. The SMA acts as dynamic support and resistance level. This means you can easily execute long and short trades by using the price action confirmation signals at the dynamic trading levels.
If you can master the use of these three indicators, you will never have to worry about your trading business. This doesn’t mean you will have to use these three indicators to filter out the quality trades. Only one indicator is enough to ensure high-quality trade execution in the Forex market. As a new trader, use the demo account to learn its use. If necessary, seek help from the trained traders to understand the proper use of these indicators.