When reading certain articles on the subject of the strategy to adopt for making money on the Forex you will learn that technical analysis plays a primordial role in achieving success. But there are many different trend indicators available on the charts of most brokers. It is therefore difficult for a beginner trader to know which indicator to use rather than another, and why. This is the subject we shall look at closely here by giving you advice on the best technical indicator to use.
The great traders and investors who generally have many years of experience in market analysis and investment in the foreign exchange market will tend to tell you that it is necessary to implement strategies that are quite complex in that they simultaneously use several technical indicators.
But if you are new to this activity, using a number of different indicators can produce the opposite effect. In fact, as a beginner, it is more judicious for you to use simple strategies that only use a single indicator. The choice of indicator that you will analyse is therefore extremely important as it is only this that the successful completion of your forecasts will depend on.
Furthermore, it is often the simplest strategies that end up being the most profitable as the error margins are so small. Once you have perfectly mastered this indicator you will be more able to start using others.
It is also important to remember the importance of technical analysis when trading on the Forex. The Forex brokers make their online trading platforms available for individuals, including functions such as the leverage effect, which enables individuals to make considerable profits with short positions. This is because technical analysis is the only method that enables you to detect a short or medium term trend.
This is why the vast majority of brokers offer analytical tools that are directly integrated into their charts in real time on the platforms they use. To put this simply, you only have to choose the asset in which you wish to invest in order to access these charts. The latter are totally customisable in such as manner that you can choose which indicators you wish them to display.
In this way it is very easy to obtain the desired information, without having to complete any calculations.
Nowadays the moving averages are a favoured indicator for traders that begin on the Forex. They enable you to rapidly detect trading opportunities as they indicate the right moment for buying or selling a position.
Moving averages are visually displayed on a chart by a line that shows the price of a currency pair over a given period. It thereby indicates the general direction of a trend.
As we have just explained, there are several different types of indicators that you can use to speculate online on currencies using CFDs. But to use them you will need to be able to correctly read the stock market charts and identify the figures that could represent opportunities and then interpret them in a coherent manner.
Luckily, if you are not a specialist in technical analysis, you will be pleased to know that these indicators can be directly provided by your broker. The vast majority of online trading platforms in fact include the major technical indicators used by their investors on their charts. You simply need to click on the icon or indicator name that you wish to use and it will be displayed directly on your chart. No need for any further calculations as it is the trading software which completes the work instead of you. You can even customise your charts so they display several indicators simultaneously.
Of course, it is still imperative that you can correctly interpret these technical indicators and use them to take winning positions. There again, the brokers have thought of everything and created colour codes that assist you in easily identifying a trend (green for a rising signal and red for a falling signal). Other platforms even offer you signals resulting from technical analyses that clearly indicate the market feeling on a given asset. Each of these trading signals is accompanied by a risk or reliability indicator that enables you to understand its pertinence and take your decision with full knowledge and no difficulties.