Get these Correlation Trading and Forex Scalping Cheatsheets FREE. Combining forex scalping with correlation trading can be a powerful combination. These cheatsheets explain to you how to do forex scalpign and correlation trading. Learn this powerful secret Fibonacci Retracement method FREE that pulls 500+ pips per trade. Watch the whole video by Tom Strignano-an EX CHIEF BANK TRADER who explains this powerful fibonacci Strike Method in detail. The number of technical indicators that are now available in technical analysis is huge and large. Now every trader narrows down the list and in the end only trades with two or three technical indicators most of the time. These two or three technical indicators give them a certain comfort level in making trading decisions.
The truth about indicators is that they can only analyze historical data. Their effectiveness is therefore limited and sometimes very misleading. What you need to learn is the master a few technical indicators in such a way that you know their strengths and weaknesses in depth. What this means is that you can interpret the trading signals and by looking at the market, know whether the trading signal generated by the technical indicator is relevant or not. We can divide technical indicators into the following broad categories:
Average Based Technical Indicators: These are the most popular technical indicators among the traders and include the different moving averages. The number of data points used in calculating the average is based on the time frame. The problem with this indicator is that it is a trailing indicator. It cannot anticipate. It can only report on the historical moves. Since an average based indicator is only a trailing indicator, it should always be used with caution.
Fibonacci Based Technical Indicators: Fibonacci based Technical Indicators are truly leading indicators and can effectively anticipate future price movements. Experienced traders heavily depend on these indicators as it helps them to anticipate other trader’s intentions. Market are overbought or oversold due to humans trying to trade their emotions. However, most traders use Fibonacci indicators as tools in conjunction with other indicators.
Trend Based Indicators: You can draw a simple trend line by connecting the high highs or the low lows. This is one form of a simple technical indicator. However, constructing a trend wall can be a much superior indicator as compared to the trend lines.
ABCD Parallelogram Indicators: These indicators are closely connected with the Fibonacci Indicators. It is based on the concept that every surge will be followed by a retracement of the same level.
Divergence Indicators; Divergence indicators like the MACD ( Moving Average Convergence Divergence) Indicator are highly popular with the traders.
Learning technical analysis and mastering these technical indicators are must for you if you want the edge that can make you a winning trader! Without learning technical analysis, you should forget about trading!