How to use indicators and what they're used for in forex
Indicators are simply tools used in the technical analysis process to forecast future price movement to assist you in making a trade If properly used. Technical indicators can add another layer to understanding how the price moves.
There is a wide range of variety when it comes to forex indicators. They all have different purposes that will altogether help a trader find a good trade setup.
Relying on only one indicator is not usually ideal, and most traders will find a system that works for them using multiples indicators. Some examples of indicators can include: Moving average, Parabolic SA, Fibonacci, Relative Strength Index (RSI) and many more.
To add an indicator into a chart, you would start off by clicking Insert located in the top left corner of your MetraTrader Platform. You would then click on indicator, and pick the specific indicator you’re looking for. There may be subcategories for the type of indicator, or it may also be directly under the indicator tab.
The second way you can attach an indicator to a chart is by dragging it over from the navigator bar into your chart. If you don’t see the navigator bar on the left corner of Metatrader 4, you would click View in the top left hand corner, then click navigator or (CTR + N). You can now continue by clicking “indicator” in the navigator, finding the specific indicator you want and dragging it on to the chart. Each indicator may have different parameters you can customize. You would input the parameters, and then click ok and it should now show up on your chart.
There are mainly 4 types of indicators. Trend following tools, trend confirmation tools, overbought/oversold tools and profit taking tools. Indicators can help you with analyzing volume, price action, and finding where to enter and exit trades. Altogether using technical analysis through indicators and implementing trading fundamentals will help you become a successful trader.