Reading the direction of the Forex trend is not an easy thing, therefore knowledge of indicators in forex is required. However, the ability to predict price movements is a basic skill for a trader.

These skills can help traders to gain profit in Forex trading. There are various ways that can be used to identify trends in trading that you can learn.

One way is to use Forex indicators. Predicting the direction of the Forex trend is not by guessing or speculating without a clear basis.

Therefore, traders need to map price projections with certain rules. There are various Forex indicators that can be chosen by Forex traders.

Moving Average as One of Indicators in Forex

The moving average indicator is the most basic and accurate indicator that you can learn at the best forex broker. This indicator is also usually used as a reference for daily technical analysis. 

So, this indicator can be said to be a mandatory indicator for novice traders. For moving average lines, you can also increase the number of moving average lines to generate crossover (per-piece) trading signals.

How to use the results of the crossover trading signal is to look at the movement of the moving average line with a shorter period against the moving average with a longer period.

The moving average is 20 for the short period and the moving average is 50 for the long period. If the short-period moving average moves up and crosses the long-period moving average, it is a "buy" signal.

Meanwhile, if the short-period moving average moves downwards and crosses the long-period moving average, it indicates a “sell” signal.

Bollinger Bands (BB)

Bollinger Bands is one of indicators in forex which is an accurate indicator as well. This indicator is a development indicator of the moving average. The middle line on the Bollinger Bands indicator is the simple moving average of 20.

While the upper band and lower band (upper and lower lines) are deviations from the middle line. Usually, the Bollinger Bands trend indicator is used by traders to find out the strength of the latest trend.

Technically, when you face resistance in the upper band or support in the lower band, the strength of the trend to continue in one direction will be tested.

The direction of the Forex trend can be predicted by traders when the candlestick moves through the lower band, and forms a period of a downtrend.

Moving Average Convergence Divergence (MACD)

The MACD indicator is one of the trend indicators that is often relied upon as a tool for indicating trend strength. If the MACD line and signal line oscillations are below point 0 then the downtrend momentum is still dominant.

On the other hand, if both lines are above point 0 it indicates an uptrend. During an uptrend, the higher the price rises, the stronger the seller's pressure to lower the price.

Whereas in a downward trend, the lower the price, the greater the buyer's interest, thus pushing the price up.

Relative Strength Index (RSI)

The relative strength index indicator is one of indicators in forex used to determine overbought or oversold conditions when the trend is happening. 

The scale for this index is from 0-100. If the line touches the scale above 70 then the market condition is overbought (overbought). 

When the line touches below 30 then the market is oversold. If it has crossed the overbought zone, the opportunity for the price to decline from its peak is great.

Meanwhile, if the price has passed the oversold zone, the potential for buyers to push the price up from the bottom of the trend is getting stronger. 

However, the weakness of this indicator is that it is unable to detect how far the price will stay in the oversold or overbought zone. So that you understand more about indicators, you can join Didimax forex broker. You can get education for free so you can trade well.

Trading must go through careful planning and practice. Understanding indicators in forex will help you in developing a good strategy.