Indicators for trading strategies

Improve your strategy with the use of indicators

Technical indicators are really popular among traders who use technical analysis. This indicators are extremely useful, but we have to bear in mind that these are tools which set guidelines, but they do not assure that something will effectively happen. Most of the trading softwares and platforms include a number of indicators that can be used.

We are showing different patterns by the indicators (of continuity, of exhaustion, etc) which we can use on our different trading strategies. Based on the price of the stocks we can lean towards a certain trading decision.

For example, the Bollinger Bands Indicator is mathematically based on technical analysis tools that a trader may use to analyze and identify past market movements and try to anticipate other market movements, and, generally recognize different patterns.

But, what are the indicators?

The indicators are mathematical formulae and statistics applied to historical market prices, the ones usually seen on the charts. The indicators are used to try to foresee if the prices are going to rise or fall. In this case, the oscillators are widely used, they have a range between 0 and 100, this are the indicators that indicate if the prices are in overbought or oversold conditions. Usually the oscillators are used in conjunction with the trend following indicators (these are the ones that fluctuate freely.)

Indicators overuse

It is noteworthy that many traders often overuse indicators, or they suffer from over information. With so many indicators available traders just cannot make up their mind. It may well seem to be too much information for beginner traders. To use many indicators at one time is complex, ultimately, affecting traders’ strategies in a negative way. It is advisable to use simple and easy to understand indicators, and not many at one time, at least at first, when you are still learning the basics.

What indicator should I use?

Although it is not mandatory for a trader to use an indicator, the indicator that you decide to use will depend entirely on your strategy. Here at AG Markets we provide you with different explanations on some of the most used and popular indicators among traders.

Some of the most often used indicators and how to use them:
Use of technical indicators

Here we provide you with a section with the classification and use of technical indicators.

Use of Forex oscillators

Here we also provide you with the explanation of the use of different oscillators to trade forex: oscillators for Forex.

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