I bet that most of you must have heard of the phrase, the trend is your friend either from a forex book, forex website or a forex course that you have taken.
Indeed being able to ride the trend is a great way to profit as such trade always produce high risk reward ratio. Therefore in this post today, I shall be sharing with you several reliable trend indicators that I have been using so that you can try them out on your trading strategy to see if it works for you as well.
MACD Indicator – The macd indicator is a great tool if you want to trade the trend. It can gives you a good entry signal simply from its crossover.
You just need to use the default setting of 12, 26, 9 provided by your trading platform.
When you are in a strong uptrend, your macd lines will be above the zero line most of the time. Therefore what you should look for is when the histogram flips to the direction of the trend.
When you are in an uptrend, what you should look for is when the histogram flips upward and you can enter a trade. It is very important that the macd lines has to be above the zero line when this happen.
If you are in a down trend, you will need the macd lines to be below the zero line and you will enter a trade when the macd histogram flips down.
Parabolic SAR – This is another indicator that can gives you buy and sell signal in a trend. When you are in an uptrend, you will enter a trade when the PSAR produces the first dot at the bottom of a candle.
When you are in a downtrend, you will enter a trade when the PSAR produces the first dot at the top of a candle.
200 Exponential Moving Average – The 200 EMA is basically an indicator to tell you the current trend of the market. When the 200 EMA is sloping upward with steep gradient, you are in a strong up trend.
Therefore the main purpose of this forex indicator is to tell the trend of the market.
As a whole, the 3 trading indicators above are reliable trend indicators that I often used when I am riding the trend. You guys can try it out on your demo account to see if it fits into your trading plan.
If you are new to forex trading, you can read the below posts for more trading tips
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