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4 Important Types of Technical Indicators

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turtlegain

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any forex trader who tries to find the right trading momentum by trying various technical indicators. In addition, they also expect technical indicators to be used to generate maximum profit. However, in practice, there is no definite formula in trading that can always generate profits. Therefore, traders must learn various technical indicators to compile their own successful trading formula.

Basically, forex technical indicators can be classified into four types. That is an indicator that shows the direction of the trend (trend-following), an indicator that confirms the trend direction (trend confirmation), an indicator that shows overbought and oversold, and an indicator that helps determine the exit level (profit taking). Here are the details.


1. Technical Indicators That Show Trend-Following
Price movements in the forex market are not only in one direction, but can go up and down. The increase and decrease itself can occur at one time only, or one period continuously. When price movements occur continuously, a trend is called a trend.

Although it may be possible to profit by trading against the trend, most traders try to enter the market in accordance with the direction of the main trend. It has been proven that how to trade by following the direction of the trend (trend-following) is very profitable.

What is the trend-following strategy? Trend-following is to determine when you have to buy or sell in the same direction as the current market trend.

How do we know what trends are going on? Well, tracking the trend situation in question can be done by indicators that follow the trend direction. One simple trend-following technical indicator that is simple, quite powerful and widely used is the Simple Moving Average (SMA).

To track trends using the Simple Moving Average, we need to install two high school indicators with different periods, such as SMA-50 Day and SMA-200 Day. The following is an example of trend tracking with the intersection method of 2 SMA curve lines:



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#1 - February 04, 2019, 07:18:15 AM
« Last Edit: July 21, 2024, 06:46:15 PM by Admin »

Nendi71

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yes this is an important indicator in trading and must be known and learned by a trader especially a beginner trader to increase trading knowledge and increase trading skills
#2 - February 04, 2019, 08:32:11 AM

Rudi

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yes, absolutely all four types of technical types must always be studied by every beginner or professional trader because this is an additional knowledge for all of us to get to know more deeply, and also be able to know more about the characteristics and technical types that exist
#3 - February 05, 2019, 12:58:27 PM

Alfrians

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there are so many trading techniques that we have to understand, about trading systems, I prefer trading with candlestick analysis, which is simpler.
#4 - February 05, 2019, 01:03:33 PM

Rudi

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Quote from: Alfrians on February 05, 2019, 01:03:33 PM
there are so many trading techniques that we have to understand, about trading systems, I prefer trading with candlestick analysis, which is simpler.
Really and most traders also prefer simple indicators to analyze, such as the moving average and trendline as the simplest indicator in my opinion because I also use this indicator as a reference to determine the direction of buy or sell
#5 - February 05, 2019, 01:51:25 PM

turtlegain

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Quote from: Nendi71 on February 04, 2019, 08:32:11 AM
yes this is an important indicator in trading and must be known and learned by a trader especially a beginner trader to increase trading knowledge and increase trading skills
yep, as a beginner, you really need to know the market trend, bro, my experience is trapped in the trend and make it a habit to use big tf
#6 - February 05, 2019, 01:56:50 PM

turtlegain

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Quote from: Rudi on February 05, 2019, 12:58:27 PM
yes, absolutely all four types of technical types must always be studied by every beginner or professional trader because this is an additional knowledge for all of us to get to know more deeply, and also be able to know more about the characteristics and technical types that exist
yep, everything has been described in the book, bro, we just want to study or just ask for a process
#7 - February 05, 2019, 01:58:19 PM

Rudi

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Quote from: Nendi71 on February 04, 2019, 08:32:11 AM
yes this is an important indicator in trading and must be known and learned by a trader especially a beginner trader to increase trading knowledge and increase trading skills
Yes it is true and must also be applied with money management that is good and measurable, and the risks that are measured do not let us only focus on mastering the technique while trading psychology is also the main thing to note,
#8 - February 05, 2019, 02:01:08 PM

Tahajud

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the most important thing in using indicators is knowing the trends that occur, so that we can follow. Because trading by following trends is the safest and most profitable trading method in my opinion. and to determine when to enter the market we can combine it with areas of support and resistance. so combining indicators with areas of support and resistance is the best way of trading in my opinion
#9 - February 06, 2019, 02:37:37 AM

Bestforex

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in my opinion all indicators are the same, namely lagging or formed after prices are formed, but in this case it is true we must have an indicator that can show the direction of the trend up or down or sideway and upper or lower saturation conditions
#10 - April 26, 2021, 07:26:03 PM

Mulyono

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The point is this indicator is only a tool for detecting price movements, and we must be aware that the conclusion of the price reading through the indicator is not absolute, so we also have to prepare the risk
#11 - June 29, 2021, 01:17:59 PM

ERSYA

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Of all these types in my opinion the most widely used is the type of trading by following the trend, because it can be easier and the results can be maximized, and can make us more calm in trading
#12 - July 02, 2021, 03:30:54 PM

CR7

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One function of the indicator is to see the trend that occurs, so we can trade by following the trend direction, because trading by following the trend direction will be safer and more comfortably
#13 - July 05, 2021, 07:44:02 AM

ERSYA

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The basis that is most widely used by traders is trading by taking advantage of the formed trend, because trading this way has proven to be quite comfortable
#14 - July 09, 2021, 02:58:37 PM

Difiq

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the most important indicator for me is the moving average as the trend and macd as the upper and lower limits because the chart is only limited to trend and support resistance
#15 - July 09, 2021, 03:26:48 PM
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