This quote fits perfectly with Forex’s best indicator for intraday trading traders of today’s generation. They are so eager to earn that they ignore a significant and vital part of learning the Traders and analyzing it. Which causes them severe damage in the long run.
Investing in the Forex market best indicators for day trading without analyzing it is just like testing the depth of the river with both feet without knowing where the market is headed and how it can affect your trading budget. Analyzing the Forex market helps traders know the best time to invest and plan a strategy to minimize their losses. A good analysis is incomplete without Forex technical indicators.
Today’s article covers the top five best Forex technical indicators for you to grow as a day trader.
Click the following link to get the best indicators for day trading:
So keep reading to get familiar with the best Forex technical indicators:
Top 5 Best Technical Indicators for Day Traders
Since you have decided to become a full-time Forex day trader, you’re ready to dedicate your time to becoming the best Forex trader. Here are some of the best technical indicators that can help you become the best day trader.
Usually, most technical indicators fall into four main categories; trend indicators, momentum indicators, volatility levels indicators, and volumetric indicators. The top five indicators described below fall into the same categories.
1. On Balance Volume
As evident by its name, the on-balance volume indicator is a volumetric indicator to analyze the trading volumes of the Forex market.
OBVs are used to identify positive and negative flows of the volume of an asset over time in the trading market. This indicator shows a continuous running difference between upwards volume and downward volume. The price volumes keep adding and subtracting according to the price points.
The higher levels of OBV mean the traders are confident in buying the asset and are trying to continue a positive trend by pushing the prices to an all-time high. Similarly, when the OBV is going down, it means the sellers are outdoing buyers, and the volume trend of assets is decreasing. This indicator works like a trend confirmation highlighting the continuation of the trends.
Moving on to the following indicator:
2. Average Directional Index
ADX, also known as the average directional index, is a momentum indicator for analyzing market trends. It shows a trend’s strength, whether it’s a stable trend or a short-term trend looking for corrections.
When the value of the ADX indicator moves above 40, the market trend is considered to have strong positive or negative momentum in the current direction. The 40 value indicates that trends will continue to move in the current direction due to a strong directional index.
Similarly, when the value of ADX is below 20, the trend is considered to have a weak directional index, and the trends are moving temporarily in the current direction.
Up next, on number 3, we have:
3. Aroon Oscillator
The Aroon oscillator is used to identify new trends of an asset, looking for new highs and lows in the Forex market by periodic calculations.
It identifies new trends in the Forex market by two lines. Aroon up and aroon line down. When the Aroon up line surpasses the Aroon down the line hitting 100 at the scale or relative values, it indicates that a new upward trend is forming.
However, when the Aroon down the line surpasses the Aroon up, hitting the maximum of 100, it indicates an incoming downward trend.
On number 4th, we have:
4. Relative Strength Index Traders
The RSI, the relative strength index indicator, can be used as an all-in-one indicator because it shows trading volumes, strengths, and momentum within a single view.
The RSI indicator is an oscillator that vibrates between a scale of value 0 to 100. This oscillation shows the overbought and oversold conditions of an asset. When the RSI indicator value rises above 70 on the scale, it shows that the asset is overbought. Meanwhile, if the value of the scale drops below 30, the asset is oversold.
Finally, the last indicator on our list is:
MACD refers to moving average convergence/divergence; an indicator is used to provide trading signals by two lines: the MACD line and the signal line.
The moments of these two lines in the graph of an asset indicate the buying and selling signals. The signal line moves slowly as compared to the MACD line. Remember that when the MACD line moves above zero, the trend is bullish. Similarly, when the MACD line is resting below zero, the trend is considered to be bearish.
Depending on the position of the MACD line in relation to zero, trading signals are carried out. To further explain this, consider the MACD line is moving above zero. If the MACD line crosses above the signal, it indicates a buying signal. In contrast, if the MACD line is below zero, then crossing the signal line below shows a short-term trade.
Remember, you don’t need to use these indicators all at once. Instead, you can group the ones you find most beneficial according to specific market conditions and use them according to your trading style.
Without an excellent technical analysis tool, you cannot recognize strong and profitable trends in the trading market. It doesn’t matter how much time you’re pouring into the technical analysis as a day trader. Suppose you’re not doing it the right way. In that case, you will never achieve excellence in day trading and always fall short of finding profitable trades.
We have provided a list of top Forex technical indicators ensuring that you don’t fall short in finding the best trades for yourself. Learning these indicators well will help you become the best day trader in a matter of time.
These technical indicators will give you an edge over others in the Forex market. Remember to get familiar with them before applying to your live Forex account. It’s better to test them into your demo account with a low budget; if anything goes sideways, you are safe financially.
Which Forex technical indicator are you planning to use in your next trade? Tell us in the comments down below.