Money
Description of Significant Indicators on the Forex Market
An indicator is a function based on a certain mathematical formula (a more detailed definition can be found in this article<\/a>). A technical forex indicator is a mathematically calculated transformation of the volume of a financial instrument and price, intended for forecasting further price changes.<\/p>
There are many different Forex indicators, many of which duplicate the same functions and differ only in interface. In the financial market, forex indicators are divided into three groups: trend indicators, oscillators, and psychological indicators. A little more detail about each of them.<\/p>
Trend indicators allow determining the direction of the price. Such forex indicators almost simultaneously determine a change or continuation of the trend. Various identification methods are used to determine trends. A popular algorithm first evaluates price dynamics and then determines the presence of a downtrend, uptrend, and sideways trend.<\/p>
The largest group of indicators is oscillators, which almost simultaneously determine a change or continuation of the trend. They are characterized by the use of small time periods, operating in a price corridor and in a flat market. Often, such forex indicators as oscillators are used to determine the level of oversold or overbought goods and services.<\/p>
The last, no less important, group is psychological indicators, which are designed to determine the psychological state and mood of exchange participants. Psychological forex indicators are of two types: consensus indicators (aggregate opinion of media, advertising, and analysts) and commitment indicators (the difference between net positions of merchants and speculators). The term 'net positions' means the difference between sell positions and buy positions in a certain group.<\/p>
Different types of forex indicators can be displayed on the price chart of the MT4 terminal or built in a separate window. It is most effective for a trader to use several types of indicators in their work. Their simultaneous use allows for a more accurate determination of price behavior in the near future.<\/p>
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