Last: 
Forex trading is indeed tempting, but for some beginner traders it can be considered quite difficult to practice. This is where the best forex indicators play a role in helping traders read the market. The role of this indicator is very important to understand market conditions and get some of the variables needed for you to trade.
Apart from that, indicators will also really help you see the market more objectively, in relation to determining accurate trading decisions. There are several types of the best forex indicators that you can use as a reference in viewing and analyzing forex market movements. The following is a further review of the best types of forex indicators that you need to know.
MUST READ!
Lots in Forex Trading: Definition and How to Calculate Them
On Balance Volume (OBV) Indicator: Definition and How to Calculate It
Trend Indicator
Of all the best forex indicators that function to analyze the market, this trend indicator has a special role. One of them is to be a direction indicator for traders. This direction will later be useful for traders to understand the latest situation of forex market conditions, even down to the smallest details. It is no wonder that this trend indicator is then affiliated as a direction indicator in forex trading.
This trend indicator is basically used to describe the market situation from start to finish, so that traders can see the big picture. Some of the best forex indicator types to see this trend are parabolic SAR, MACD or Moving Average Convergence Divergence, and MA or Moving Average. You can use these indicators to identify forex market trends. At least, use one of these trend indicators to help you in trading.
Volume Indicator
The next best type of forex indicator is the volume indicator. A very important indicator to know the latest volume of the forex market when trading. By knowing the size of this trading volume, traders will have sufficient information about the direction of the emerging trend, including seeing if there is a possibility of a reversal when the trend is in progress.
When trading volume conditions are low, this refers to the possibility of a reversal trend. Meanwhile, when trading volume increases, the possibility is that prices will also increase. Even so, this high market volume does not necessarily push prices up at certain moments. It is not impossible that the currency pair that is being traded with a fairly narrow range will cause a breakout.
The best types of forex indicators for volume indication that you can use are Money Flow, Money Flow Index, On Balance Volume, or Demand Index. Remember, the main function of this volume indicator is to see the trading volume behind the price movement process that can be very profitable for traders. Price movements generally occur because there is a fairly high trading volume. You can use this as a powerful instrument to look for signs of price movement.
Momentum Indicator
Next from the best forex indicator types that you need to know is also the momentum indicator. An indicator that you can use to find out whether the market is in an overbought or oversold position. The position where the market is in an overbought condition, then there is a high possibility that the price will decrease until it can no longer be predicted.
This continuously falling price position will very likely reach the oversold position. In an oversold situation, it can be interpreted that the price continues to fall for a long period, then at some point there will definitely be an increase in price. To help you read this momentum indicator, you can use the Relative Strength Index (RSI), Commodity Channel Index (CCI), or Momentum and Stochastic.
Volatility Indicator
The next best forex indicator is the volatility indicator type. It may still sound foreign to you as a beginner because it is generally better known as a band indicator. You need to know that in trading, price and volatility are interconnected. This means that when one changes, the other will also change. This volatility indicator allows you as a trader to know the price range and study the current market situation.
In other words, this volatility indicator itself can determine whether the market is in a truly active condition or not. When the market is in an active condition, the market will have a fairly optimal and dynamic variation in price movements. To help you analyze this volatility indicator, you can use Bollinger Bands, MA or Moving Average, and Envelopes.
These volatility or band indicators generally use a range to show you the price and volume behavior in every movement that occurs in the market. This indicator will be very useful for traders because changes in market behavior can be a very good entry sign. This sign can be used by traders as a benchmark for opening positions in the market. Of course with a choice of supporting strategies too.
Profit Income Indicator
The last best type of forex indicator is of course the profit income or profit taking indicator. Given that trading activities themselves have the main goal of making a profit, the existence of this indicator is clearly important when analyzing the forex market. Specifically for this indicator, you can use the RSI with a three-day time frame. Traders with long positions must take profit if the RSI in the three-day time frame rises to a high level of 80.
MUST KNOW!
Forex Indicators: Definition, Functions and Types of Indicators
On the other hand, if the position taken by the trader is a short position, with the RSI indicator must show the lowest level of 20 or far below. In addition to RSI, you can also use Bollinger Bands to check this profit indicator, utilizing the standard deviation of price change data in a certain period on this indicator. Optimize according to the function and features of the indicator to get a better reading.
In closing, one thing you need to remember regarding the use of this forex indicator is its main benefit. Look for the best opportunities so that you can make decisions in your trading process that also produce commensurate profits.
In addition, it should also be remembered that this best forex indicator is used in a harmonious function. In other words, each indicator cannot stand alone to be read and analyzed by a trader. That's the most important thing for you to remember.
You need to combine several types of indicators to produce comprehensive readings and analysis as well as to produce comprehensive analysis. Its influence is also felt in the trading results you do. So, the more complex the indicators you read, the better.
If you decide to use a particular indicator feature or application, make sure you also study the ins and outs of its features well so that you do not misread and analyze later. Of course, so as not to cause losses in the trading activities you do.
Visit GIC Indonesia to get information about the world of trading. You can also join us in the Telegram Community GIC Trade and Telegram Channel GIC Trade. Don't forget to check the Youtube account GIC Indonesia which is full of lots of information, and follow our Instagram account to get information about various interesting webinars that you can follow.
