Getting in and out of a trading position at the right time can make a big difference in a trader’s account. However this is not a simple task but it can be done with the help of several buy and sell indicators.
There are a wide variety of indicators available in our trading platform but not all of them are able to generate reliable buy and sell signals for us to trade. In this post, I will be sharing with you some of the buy and sell indicators that I find quite reliable and useful for myself.
Below are the buy and sell indicators that I often used:
1) Forex MACD Indicator: I have written several posts on the power of MACD and here I am going to share with you how I make use of MACD to time my entry and exit of my trading position.
The MACD is a good tool to verify a breakout or trend line break and all you need is to make use of the histogram in it. Whenever you have a setup that prompts you to enter a SHORT trade, you should wait for the MACD histogram to flip below the water line. This is to prevent fake out actions that is pretty common in trading and thus increase your winning percentage.
Similarly, you can exit your position when you see the MACD histogram flipping to the opposite side of your position.
2) Parabolic SAR: For this indicator, you can make use of the dot that is formed either above or below the candlestick to enter or exit your trades. When you are looking to go SHORT, you can wait for the dot to be formed above the candlestick. When you are looking to go LONG, you can wait for the dot to be formed below the candlestick.
As for your exit strategy, you can exit your position when the dot flips to the opposite side of your trade.
3) Forex CCI Indicator: If I am looking to go LONG, I will wait for the CCI to move to the 100 level and then enter my position. If I am looking to go SHORT, I will wait for it to move to the -100 level before entering a trade.
As for the exit, you simply have to take note of the opposite situation to occur before exiting your position.
Although the above buy and sell indicators are pretty reliable, I do not enter my trade simply based on one indicator alone. I will usually wait for a confluence of events to occur before I enter any trade.
Personally, I will wait for the signal on the MACD, CCI and Parabolic SAR indicators to be showing the same signal before entering any position as this will usually give me better winning probability. Just a reminder to you, please do not rush into using these indicators to your trade until you have tried them out on your demo account.
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