There are over a hundred different indicators that you can use in your trading. As it is pretty impossible for anyone to be able to understand all the various indicators available, I often encountered this question from my blog readers.
What Is The Best Forex Indicator To Use?
In fact, this is also my number one question when I first started trading forex a few years back. After pondering on this question for sometime and after these years of trading and trying. I finally have a set of indicator that I think is the best for me.
But let me tell you the best forex indicator that is voted by numerous forex traders in a forex magazine.
The 200 Exponential Moving Average!
If you take a look at your trading chart, you will often find the price being repelled by the 200 EMA and thus it serves as a very good tool to predict price movement. To make use of the 200 EMA, you can enter a SELL trade if the candle moves below the 200 EMA and you can enter a BUY trade if the candle moves above the 200 EMA.
As for me, these are the indicators that I find the best for me:
1) Moving Average Convergence Divergence (MACD) – The MACD allows me to confirm any breakout and it helps me to validate any trend line break before I enter a trade. This alone saves me a lot of money due to fake outs.
2) Stochastic (SLOW) – I use the stochastic to help me check if the market is currently oversold or overbought. This usually provides me with more confident to enter a trade.
3) Parabolic SAR – This is a visual tool that plots a dot below a candle in an uptrend and a dot above the candle if you are in a downtrend. This also helps to provide me with buy and sell signal.
4) Multiple Moving Averages – I use the 100, 200 and 400 EMAs to help me identify the market trend and I also use them to help me check the strength of the trend.
These are the best forex indicators that I find working for me and my trading strategies. However you have to test them out to see if it fits into your trading plan as well before you put them to use in your trading.