Though very challenging, day trading can also offer pure excitement to traders who will opt to venture it. Forex trading indicators can offer much-needed help in easing up the challenges encountered by day traders. Top Three Forex Indicators That Are Most Suitable in Making Profits on Day Trading
Making Profits on Day Trading
You might feel like there are personal biases when it comes to choosing the best Forex indicators out there.
The opinions when it comes to the ‘best’ indicators could be decided based on personal experiences but nonetheless, explaining how they work and how everything is done should give you a clear view of indicators that will best suit your trading lifestyle.
Repainting and Non-Repainting Indicators – Which works better?
For you to have a better understanding of this topic, it is important to know all the concepts involved in it.
If someone refers to a trading indicator as ‘non-repainting’ or ‘repainting’, this means that there’s a possibility of changes in the calculation over time.
One of the problems with repainting is the fact that it gets skewed after some time.
For this reason, you should never rely on a signal from a single, particular indicator when taking a trade. Indicators are there to help you with the confirmation of the price action that you are looking to achieve.
Top 3 Best Forex Trading Indicators
The Classic Exponential Moving Average (EMA)
It seems like nothing still beats the classic indicator – the Exponential Moving Average (EMA). Amidst all other indicators available nowadays, the classic EMA still tops as the most popular indicators that traders use, allowing it to maintain its credibility for the fact that many people have their eyes on them.
You may use the exponential moving average which helps in determining the longer-term trend. But then, you can also make use of the shorter exponential moving average whether it lines up with the bigger one.
Relative Strength Index (RSI)
Just like what its name suggests, this indicator measures the relative strength.
It takes on the momentum which was utilized by technical analysis practitioners when it comes to measuring the price changes in a particular currency pair.
This will help in determining the movement of the market if it will be thought of as oversold or overbought.
This indicator is found at the bottom of the chart and is seen as an oscillator containing a reading with 0 to 100 in it. RSI has been used for more than 50 years and a lot of traders tend to use it in different time frames.
Previous Day’s Low/High | Making Profits on Day Trading
While not particularly speaking as an “indicator”, comparing the highs and lows of the previous trading sessions creates a huge difference in how everything works on the next trading day. It is also considered as part of the entire technical analysis.
See Also- Technology Blog for Free guest posting
A professional day trader tends to keep track of different important levels, particularly the highs and lows of the previous trading day. This strategy is rather simple.
If a particular level has caused resistance from the previous day, while on the present day, it shows that you are now trading above it, this indicates that the momentum continues to be an upside or vice versa.