From the variety of indicators that are offered to a Forex trader, a beginner can simply get confused! Or he will make the most common mistake - he will put a huge number of indicators in the chart window. And they, meanwhile, will perfectly punish the debutant for this action, giving multidirectional testimony! After all, this is not trading in advisors when the program does everything for you ...
So what are the most useful indicators and how to use them?
These questions are the most common among newcomers to the Forex market, because any trading system involves the use of indicators! Let's try to figure it out.
The most common indicator is moving averages . Almost any professional trader relies on them. But in the "classical" interpretation, they cannot be used! The signal that will be given by the crossing of the moving average lines always lags behind the Forex market, which will already make a huge move.
But why then are they used? Yes, there are many modifications of the moving average lines, both shifted forward and shifted back. But think about why they are not abandoned?
Yes, because their testimony is based on a price that will never deceive. You just need to use them wisely! How?
Take Bill Williams' alligator indicator, for example. In 60 percent of cases, he will give a false signal to enter the market, and if he gives a correct signal, then the main movement will be behind, and you will only get to catch the peak of the movement, which is also very dangerous - here no trailing stop will help. This indicator consists of three moving average lines.
It is clear that in the “ classic ” version the Forex currency market will outsmart you, but do traders use this indicator? Yes, but the interpretation of the signals is completely different.
First, you need to add something to it. What can be added to the moving averages? Another, " heavy " 200-day EMA. Why?
For technical analysis.
Second, the time frame! The analysis is carried out on the Н4 chart - this is a medium-term price movement. This is where the alligator will become your ally.
See how the alligator is positioned in relation to the heavy medium. If it is below it, then the medium-term trend is bearish. If higher, then the trend is bullish. Here is a hint - the direction of opening positions! As long as " alligator " is under the "heavy" average, all trades should be opened on SELL. Naturally, from rollbacks up.
In this interpretation of the readings of moving averages, the Forex currency market
