Forex Essentials Course: 21 lessons to get started in Forex
6
2
18. Technical Indicators
Thu, Sep 25 2008, 16:33 GMT
by PFX Team
A technical indicator is applied to a chart and uses three pieces of information – time, price and volume, to give you insight into where a pair is headed.
Because the forex is a distributed market, there is very little volume information. That leaves just price and time. There are a lot of ways to analyze that information and the potential variables are endless. Understanding how to wade through the swamp is vital. Technical indicators can help.
Types of technical indicators
Most technical indicators fall into two groups.
Oscillators, which include stochastics, MACD, CCI, RSI and many other popular indicators.
Moving average indicators which are usually overlaid directly on the price chart.
Hybrids and uniques don’t fall into either category but they are rare, and will be discussed in a later advanced course.
For the remainder of this section, we will discuss oscillators.
Is that you oscillating?
An oscillator is a technical indicator that moves up and down (oscillates) within a range. They are usually designed to show the current trend and help identify potential reversals.
There are many different oscillators, and all of them have their own strengths and weaknesses. We use the CCI and MACD indicators quite a bit at PFX, and we will use them as examples below.
Technical indicators have some great advantages and some big drawbacks. Their biggest advantage is that they simplify price movement and are very easy to build rules around. Most technical indicators have very clear breakout levels.
The disadvantage with technical indicators is that they lag price movement. By the time a breakout is identified on the indicator, the price move has already been in play for a while. Despite that, there are a few ways to use technical indicators that can be really helpful. We will discuss two specific ways in this section.
Forex Essentials Course - 21 lessons:
1. What is the forex2. Supply and Demand
3. How Trading Works - Interbank and the Forex
4. Choosing a Dealer
5. Forex Pairs - Characteristics and Qualities
6. Earning Interest in the Forex
7. Margin and Leverage
8. Short Term vs. Long Term Trading
9. Forex Futures vs. Spot Forex Accounts
10. Fundamental Analysis in the Forex
11. The Calendar and Economic News
12. Introduction to Charting and Technical Analysis
13. Support and Resistance
14. Fibonacci Analysis
15. Price Patterns
16. Continuation Patterns
17. Reversal Patterns
18. Technical Indicators
19. Portfolio management – Diversification
20. Portfolio Management - Position Sizing and Stop Losses
21. Introduction for Forex Options
Published on Tue, Nov 18 2008, 17:32 GMT
Archive
- Introduction: Getting Started In Forex
Published On Tue, Nov 18 2008, 17:39 GMT - 1. What is the forex
Published On Mon, Oct 27 2008, 14:53 GMT - 2. Supply and Demand
Published On Fri, Oct 24 2008, 14:20 GMT - 3. How Trading Works - Interbank and the Forex
Published On Fri, Oct 24 2008, 09:06 GMT - 4. Choosing a Dealer
Published On Thu, Oct 23 2008, 09:57 GMT
LearningMarkets.com
http://www.learningmarkets.com/ | feedback@learningmarkets.com
Legal disclaimer and risk disclosure
The materials on Learning Markets, LLC's web site are provided "as is." Learning Markets, LLC makes no warranties, expressed or implied, and hereby disclaims and negates all other warranties, including without limitation, implied warranties or conditions of merchantability, fitness for a particular purpose, or non-infringement of intellectual property or other violation of rights. Further, Learning Markets, LLC does not warrant or make any representations concerning the accuracy, likely results, or reliability of the use of the materials on its Internet web site or otherwise relating to such materials or on any sites linked to this site. The information contained in this web site is impersonal and does not provide individualized advice or recommendations for any specific user. The commentary, analysis, opinions, advice and recommendations presented on this web site represent the personal and subjective views of the author and are subject to change at any time without notice. Nothing shall be construed as a solicitation or offer to buy or sell any securities.Related reports
Weekly Focus - Is it strong enough? by Danske Bank A/S
Fri, Jul 3 2009, 15:00 GMT
Weekly Market Commentary - Libor and Official Interest rates are at their narrowest by Mizuho Corporate Bank
Fri, Jul 3 2009, 14:33 GMT
Your Summer Housing Market Update by Money and Markets
Fri, Jul 3 2009, 12:39 GMT
Friday Notes - W-shaped recovery increasingly probable by UniCredit Group
Fri, Jul 3 2009, 12:08 GMT
Asia Market Update - Most Asian equities indices track the US session declines as nonfarm payrolls data disappoints by TradeTheNews.com
Fri, Jul 3 2009, 11:55 GMT
indicator, technical, education, basics
View AllRelated content
2nd UPDATE: UK Service Sector Grows, End Of Recession Nears
Dow Jones | Fri, Jul 3 2009, 10:15 GMT
UPDATE: UK Service Sector Grows, But Slows In June
Dow Jones | Fri, Jul 3 2009, 09:43 GMT
CORRECT: DATA SNAP:Euro-Zone Jun Output Decline Slows Further
Dow Jones | Fri, Jul 3 2009, 09:39 GMT
UPDATE: Euro-Zone Output Decline Slows Further In June
Dow Jones | Fri, Jul 3 2009, 09:30 GMT
Euro Zone May Retail Sales fall 0.4% MoM and 3.3% YoY
FXstreet.com | Fri, Jul 3 2009, 09:06 GMT
indicator, technical, education, basics
View AllInterested in forex trading? forex brokerage firms!
GET CASH BACK FOR YOUR TRADES! Learn more about the Pip Rebate Program
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2009 "FXstreet.com. The Forex Market" All Rights Reserved.