Technical indicators are common technical tools used by traders worldwide to FOREX and other markets. In this article we will present the 3 most powerful indicators for currency trading.

1 – Bollinger Bands
Developed by John Bollinger in the 80s, the Bollinger Bands are one of the most powerful trade indicators. Operators providing dynamic support and resistance levels based on market volatility – and are very useful to measure the trend and range. Operators can use Bollinger Bands to estimate the overbought and oversold periods: if prices are near the lower band are oversold and near the upper band are overbought. Thus, this indicator can serve as a leading indicator and produce trading signals on investment.

2 – Moving Average
EDGAR is also a very powerful indicator of trade – not as a trend-following indicator, but as a leader. In IndicatorForex.com, negotiate the moving averages in a unique way – as a retreat area. Thus, the trader expects the price to go back and try moving average as the level of supportresistance. If price bounces off the moving average, is issued a trade. This is a very powerful technique that is capable of producing high probability trades with the risk of small and large profits. A combination of trend-following the identification of investment and is a useful strategy in the FOREX. Another use of moving averages is measured between the periods of the trends and range. It is very important to not know whether the price is in trend or range, as it changes the whole trading philosophy and methodology: at range we will take at trend reversal trades while we will attempt to join the trade in retracements or pullbacks. The moving average slope indicates a tendency or range, if the slope is steep (the moving average trend), the price is flat trend and if the price is within reach.

3 – Relative Strength Index
Developed by J. Welles Wilder, the Relative Strength Index (RSI) is one of the world's most popular indicators. It is an oscillator which shows in overbought and oversold price periods generates signals of reversal. Their signals are high quality and generally predict a reversal of trends before other means of analysis. Signals are generated when the indicator crosses the overbought or oversold level – a cross below indicates a long entry, whereas a cross above indicates a short entry. The best sign is when the RSI touches one of the levels immediately redraws the other direction. This indicates that the level has a strong psychological effect on prices and that investment will be strong and fast.
 

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