An indicator is the most important tool for technical analysis. Decisions about how and when to trade can be made on the basis of technical indicator signals. The essence of technical indicators is a mathematical transformation of a financial symbol price aimed at forecasting future price changes. This provides an opportunity to identify various characteristics and patterns in price dynamics which are invisible to the naked eye.

In accordance with the functional properties, indicators can be divided into two types: trend indicators and oscillators. Trend indicators help to identify the price direction and find trend reversal moments synchronously or with a delay. Oscillators allow to define market reversal points in advance or simultaneously.

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A separate category includes indicators calculated based on volumes. For the Forex market, 'volume' means the number of ticks price changes within a time interval. For stock securities volume means the volume of executed trades in contracts or money terms. Another category is Bill Williams' indicators. They are included into a separate group because they are part of the trading system described in his books.

The above categories include built-in indicators of the trading platform. A large number of custom technical indicators can also be used in the platform. You can download source codes of various free applications from the Code Base.

Using Technical Indicators to Develop Trading Strategies

Thousands of ready-to use applications for technical analysis and automated trading are also available on the Market. For convenience, all the indicators are divided into groups in the Navigator window. The most convenient way to apply an indicator is to drag it from the Navigator window. You can also use the Indicators command from the Insert menu or button on the Standard toolbar. A technical indicator can be drawn in a separate indicator window with its own vertical scale for example, MACD or applied directly onto a price chart like Moving Average. The settings of a running indicator can be changed.

These indicators are used to determine the direction to trade before the new trend has started.

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In other words, they often lead traders in the wrong direction. Examples of leading indicators are relative strength indexes RSIs and stochastic indicators. An RSI is used most often to help traders identify market momentum, market conditions and warning signals for adverse price movements. The RSI is expressed as a figure between 0 and An asset with an RSI of around 70 is often considered overbought, while an asset at or near 30 can be thought of as oversold.

An overbought signal suggests that short-term gains could be coming to an end and that a price correction may come soon. In contrast, an oversold signal could mean that short-term losses may soon come to an end and that assets will soon strengthen. The general idea behind lagging indicators is that they remove a lot of market noise, making trends clearer. However, the downside to lagging indicators is that they only alert you to a new trend after that trend has started. The classic moving average crossover system is a good example of how lagging indicators signal a shift in market sentiment after a new trend has started.

If moving averages are converging, it suggests market momentum is decreasing. If the moving averages are diverging, momentum is likely increasing. Lastly, we come to confirming technical indicators.

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As their name implies, confirming indicators are used to confirm that your readings of price action are correct. I have been following him since long. The boss thanks for the hard truth and insightful education. We are glad to have you as a mentor. Good job boss… Your learnings are to the points.

No timepass….

Sir on many websites, chandelier indicator is not available. Instead of it can we use super trend with similar setting along with ATR. Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page. Share 0.

Forex trading: How to use signal indicators

Tweet 0. Nice training sir. But you only do quality education training. Thanks Rayner. Many thanks and keep on doing your great work.

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God Bless! Thank you, Vicky!

Not quite sure what your question is, could you explain further? I used to use them to give me direction of the trend especialy stochastic oscillator. Tq Mr Reynar for the excellent explanations especially for the newbie in stocks.