The Best Technical Indicators for Day Trading

1. The Best Technical Indicators for Day Trading If you are thinking of investing in the foreign exchange market, then you must learn Forex trading as well as join a Forex community that is going to help you hone your trading skills. Moreover, you need to know several technical indicators to follow and predict your next move. If you choose your indicators wisely, you can formulate an excellent strategy for a profitable trading journey. Practically speaking, there are five categories of indicators, and each category is divided into two types; leading or lagging indicators. The Leading indicators predict what the next value will be, whereas the lagging ones provide a prediction based on the historical data. Now let us pick the best technical indicators for all the day traders. Exponential Moving Averages (50,200) EMAs are generally used to predict the overall trends in the market, either bullish or bearish. EMA 50-day and EMA 200-day look back at the historical price data, calculate its average and then move accordingly. You can use the 50-day EMA to measure the average price and the 200-day EMA to measure long-term trends. These indicators are better versions of SMAs (simple moving average). Relative Strength Indicator Relative Strength Indicator, commonly known as the RSI, can determine when the buy- and-sell cycles in the market are about to begin. These cycles determine the peak levels like overbought or oversold and then indicate a shift in the overall trend. A Relative Strength Indicator cannot always determine the movement of the market in the opposite direction because overall price movements are driven by other factors as well, such as volume and momentum. Bollinger Bands Bollinger bands (20, 2) lie in the category of indicators that determine the turning points by measuring how far a price can go from a central point which usually is a simple moving average. In addition to that, the bands constrict or widen due to changes in volatility.

2. MACD MACD is a momentum indicator. It stands for moving average convergence divergence. It is one of the essential technical indicators usually set at 12, 26, and 9. This tool indicates how fast a market is moving and its turning points. MACD is generally in the form of a histogram whose height and depth determine various aspects of the price fluctuations creating valuable market data. On-Balance-Volume (OBV) Volume in a market plays a vital role in determining the movement of a market at a particular point in time. These volume indicators are usually placed under your price bars. This can often indicate new trends and changes in patterns for trading experts. You can also incorporate a moving average with the On-Balance-Volume (OBV) to make inferences based on historical data. It also works exceptionally well with the MACD momentum indicator. Final Words For the people who are just starting their Forex trading journey, it can be pretty intimidating to choose the right mix of appropriate technical indicators for your charts but not anymore. Our scalping software uses some of these in order to fine the best entries and you receive set-up support with every purchase! However, if you’d like to discuss these in greater details we offer consultation services where we can discuss technicalities of our EAs in greater detail!