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What are the technical indicators Forex?

Author: Anil Luis Kumar Addipalli

A technical indicator is a series of points used to predict the movement of the currency in a financial product or other. You Indicators technicians following the most famous and learn to build their own technical indicators. * The relative strength index (RSI)
* The Stochastic Oscillator
* Moving Average Convergence Divergence (MACD) [of moving average convergence and divergence *]
* Number theory
* Waves
* Gaps or trenches
* Trends
* Table of formations

The Relative Strength Index (RSI):


This index is an indicator of popular scholarship. The RSI measures the ratio of upward trends in comparison with those below and normalizes the calculation so that the index is a number between 1 and 100. If the instrument of the RSI is 70 or more is considered to be overbought (a situation in which prices have risen well above the market expectations). The RSI is less than or equal to 30 indicates an instrument in an oversold position (situation in which prices fell much more than the market has forecast).

The Stochastic oscillator:

It is used to indicate the conditions for overbought / oversold on a scale of 0 to 100%. This indicator is based on the observation that the upward trend, closing prices tend to concentrate on the highest part of the extended period. Conversely, when prices are marked downward trend, closing prices tend to concentrate in the bottom of the extended period.

Stochastic calculations produce two lines,% K and% D that are used to indicate areas of overbought / oversold conditions on a graph. The gap between the stochastic lines and the share price of the underlying instrument gives a powerful signal to the operation.

Moving Average Convergence Divergence (MACD):

This indicator is composed of two momentum lines. The MACD line is the difference between two exponential moving averages and the signal line is an exponential moving average apart. If you cross the line and the MACD signal line, is considered a sign of change in trend is very likely.

Theory numbers:

The Fibonacci sequence:
The Fibonacci sequence (1,1,2,3,5,8,13,21,34 ... ..) is constructed by adding two numbers to get to third. The ratio of any number compared to the other is 62% which is a popular figure Fibonacci retracement. The back 62%, that is 38%, is also used as a fall in sales of Fibonacci (used with the theory of Elliott wave, see below)

Angles Gann:
WD Gann was a trader in stock market values and worked in the '50s and have performed more than 50 billion dollars in the market. He made his fortune using methods he developed as tools of trade based on the relationships between price movement and time, known as the equivalent price in the time. There is no simple explanation for Gann's methods, but basically, the angles are used on maps to identify areas of support and resistance and determine the times of future changes in trends. He also used lines in charts to identify areas of support and resistance.

Waves:

The Elliott wave theory:
The theory of Elliott wave analysis is an approach to market is based on repetitive patterns of wave and the Fibonacci sequence. An ideal model of Elliott wave consists of five waves surging waves, followed by three down.
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The gaps or trenches:

Gaps are spaces left on the bar chart where no trading has taken place. A gap up or gap to be formed when the lowest price for a trading day is higher than the highest price the previous day.

Unlike down or down gap is formed when the highest price for a day is lower than the lowest price the previous day. A final difference is usually a sign of market strength, while a weak difference is a sign of market weakness.

A gap or void of fracture is a price gap that remains remain an important trend in prices is greater. This marks the beginning of a significant price movement.

A gap or output gap is a price difference which usually occurs around the middle of a major market trend. For this reason it is also called a measuring gap.

Unlike dyspnea or the gap is a price gap that occurs at the end of an important trend and signals that the trend is coming to an end.

Trends:

A trend refers to the direction of prices. Peak and troughs of the upward trend are increasing, and peak and trough of the decline are the trends defining downward slope of the trend. The rupture of a general trend line indicates a reversal. A change in trade is characterized by horizontal peaks and valleys.

Moving averages are used to harmonize the pricing information to confirm trends and support and resistance levels. They are always helpful in determining a marketing strategy to specific markets or future distributors with a strong upward or downward.

For the moving average simple, price is an average over many days. Day after day, the highest price is removed and replaced by the current day's price - and changes in the average daily. For exponential moving averages or weighted, using the same technique, but provides the figures - whose weight low price for the oldest coefficient and high price later.

Chart Formations:

Examples of graphic formats: (triangle, rectangle, head-shoulder-shoulder)

About the author:

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