Are you looking to get into Forex trading? Perhaps you’ve already started and are seeking to improve and increase your level of success? One of the most popular and more importantly most effective ways to do this is to utilise a forex indicator(s). Indicators are extremely beneficial and have been used by Forex traders for many years. For more information head over to:
To accompany this video we will be discussing leading indicators, what they do and an example of said leading indicators. Leading indicators work by providing traders with signals before an event or trend is about to happen, which allows traders to enter the market pre event occurrence. This, as you would expect, can be advantageous as it allows a trader to get in and out quicker, as well as increasing the profitability, however on the down side leading indicators can be prone to producing false signals. For this reason, it is almost always best two use at least two leading indicators (also called Oscillators) in tandem.
The two most common leading indicators are RSI and Stochastic. They are both used to determine when overbought and oversold conditions are prevalent within the market (overbought = too much buying is happening and there may be a correction incoming; oversold = too much selling is happening and a rebound may occur). Although they show the same data, they do convey them in slightly different ways, with RSI using one line and Stochastic utilising two, with an upper area (overbought) and a lower area (oversold). Using both of these leading indicators (oscillators) can be a tad difficult to begin with but it is easy to pick up. As with everything, ‘repetition is the mother of learning’, so the more you do it, the quicker you’ll be able to read, understand and apply it to your trading.
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