If you participate in Foreign Exchange or Forex for the first time, you can easily get lost with the chaotic financial markets. But knowing the different forex indicators will lessen the confusion and will help you make good decisions.
With proper use of indicators you can identify opportunities which can gain your profit. Although it can’t be used to predict what will happened in the market but it can help you out. There are also times when these indicators are misleading so you have to be careful in making decisions.
There are several forex indicators but there are those which are very helpful like the Moving Averages and Relative Strength Index.
Moving average is the most used forex indicator for technical analysis. As the word suggest it is the average of the data that is collected in a certain period of time. For instance, in a 10 day period you will get the closing prices of the currency, add all of these data and divide it y 10. The average you get will be plotted in a chart. You will continue getting the average and plot it in the chart.
With the chart you will have an idea on the typical price in a certain time frame.
The RSI or Relative Strength Index calculates the relation of up moves to down moves; the result will then be expressed in a scale of 0-100. If the data on RSI is greater than 70, this means that the prices have risen more than what is expected. This situation is referred to as overbought.
However if the result is less than 30, this is termed as oversold. This means that the prices have decreased more than what is expected.
You can also refer to forex future online system trading before you make any moves. Remember that you have to take some risk so you can win some.