Trading software plays an important role when it comes to trading. It is equipped with unique features that make trading easier. But it is important to know which ones are the best to include when it comes to indicators.
Research shows that you can use some of the best indicators on Forex. Each trader has the indicators that he uses the most. Traders can combine different indicators to track and inform each other. For example, they can combine three indicators and won’t trade until they all give the same “response.” You need to study each indicator separately until you know how each one reacts to price movements, and then just start looking for the combination that will be best for your trading style.
The advantage of using Forex indicators lies in the flexibility and freedom they give traders. If Forex indicators are used correctly, you can make the difference between profit and loss probability.
All the best Forex indicators that are available to traders are designed to calculate price parameters, as you can say that Forex indicators are mathematical formulas. Any trader who wants to succeed should use tools that help him make the right trading decisions. In this article, we will have a look at top MT5 indicators to have in your trading software.
What are the strongest indicators used on Forex?
As we mentioned, there are some of the best indicators to use on Forex, but the strongest indicator used on Forex is convergence/divergence of moving averages or MACD. It is the most common oscillator. Traders often use MACD to check price momentum, direction, and price trend. The MACD consists of three components, a histogram, and two moving averages.
MACD has many trading strategies. Divergence is when price movement is the opposite of what MACD does. When the price is lower and the MACD forms higher lows, it is called a bull’s signal, but when the price is higher and the MACD forms lower lows, it is called a bearish signal.
Convergence/divergence of moving averages is a better Forex indicator more reliable than other indicators. Its biggest advantage is that it can be independent or may be with other leading and lagging indicators. The biggest drawback is that MACD is a lag indicator, which means that MACD signals after a while when the movement has already occurred.
Best Forex Indicators
Here is a list of proven Forex indicators:
The JBR trend indicator determines the direction of the trend. In red and green signal lines they describe the volume of the trend. The purchase area is red and the sale area is green. When the arrow is directed downwards and the price is in the red zone, JBR changes its color from red to green and then gives a strong signal to purchase.
On the contrary, if the arrow moves up and the price is in the green zone, JBR changes its color from green to red, giving clear signals for sale.
The Bollinger Band is an indicator that measures market volatility. It consists of three bands and keeps the price between the top and bottom bands.
For a short period of time, the price can stretch to the outer line, and when this happens, the bands move closer together or move away from the other. If the distance between the bands is smaller, this indicates low market volatility, and the greater distance between the bands indicates high market volatility.
The Relative Strength Index is a powerful oscillator and very easy to use. Its task is to show traders when the currency is oversold or overbought. These are the best indicators, especially for traders who buy cheaply and sell expensively.
The RSI graph uses a range of values from 0 to 100. The value of overbought is marked by the number 100, and the oversold – 0.
All indicators have both advantages and disadvantages. Traders should rely on their research and experience. All traders are encouraged to combine more types of indicators, but to make the most of trading instruments, they need to learn how to analyze them and have at least 4 of them on their charts.