forex indicators
Fibonacci Retracement – Utilizing Fibonacci Ratios To Your Advantage
Fibonacci retracement ratios are used by forex traders that use technical analysis to identify support and resistance areas in a array of financial markets. The vast majority of traders use them with their forex trading strategy.
Leonardo Fibonacci was the inventor of a sequence of numbers that are used in the Fibonacci retracement tool. Retracements are created when the trader picks a high and low price point on the charts that are divided by a few ratios. These ratios are 23.6%, 38.2%, 50%, 61.8% and 100%..
Exponential Moving Average – The EMA Forex Indicator
It is known that the exponential moving average line is created averaging a number of period points in addition to averaging them.
The difference between the simple moving average is the fact that fresh points are given additional weight. Identical weight on period points are given in the SMA indicator. What is the rationale for adding weight? It was found that many traders needed a moving average that reacted quicker to abrupt changes in price.
Hence, the creation of the exponential moving average. This is seen simply by overlaying both the SMA and the EMA on the same charts. But it does not always do well. Quick reaction to price may give the trader a incorrect signal.
Simple Moving Average – SMA Indicator Tutorial
We know that the Simple Moving Average (SMA) is an average of a predetermined number of data points which is then plotted on the chart. To demonstrate, a SMA of 10 on the daily charts is created by taking the closing prices of the 10 recent days plus averaging them. A point on the financial instrument chart is created.
The last data point is removed on the 11th day to accommodate new data. This is done over and over again. It is an suitable indicator for long term trends as each point in the series is given equivalent weight. As such, many traders implement the SMA into their forex trading strategy.
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