You can find the Gauge Stick of Success in Indicators

November 9th, 2017 → 3:28 pm @

You can find the Gauge Stick of Success in Indicators

 

Most of the professional traders are doing trading with technical analysis, and they are using various indicators according to their convenience in trading. Indicators are just supporting components. It do not provide any specific buy or sell signals; if traders have their own unique trading style they must take the signals to determine trade entry and exit points. If it goes in a successful path then he/she can confirm his or her unique trading style. Technical trading indicators help to identify probability trade entry and exit points. In most of the technical analysis software they are using various kinds of indicators for the importance of trading strategies. There are hundreds of indicators are available for technical ananlysis, and they are implemented in various charting plat forms. Technical indicators are mathematical calculators. Its calculations are based on the volume activity and the current and past price of a trading instrument.  Each of them has its own specification for working. It is very easy to use some indicators for prediction as well as the study of charts.

Now a day’s most of the professional traders using Meta trader 4 platform. In mt4 platform there are lots of custom indicators that work together to form the perfect setup. Technical analysts predict future price levels by examine historical performance. There exist several different types of indicators, which includes trend indicators, volatility, momentum and volume.  

Some of the indicators may lead to counting of the same information in multiple times. This problem is called multi collinearity problem in technical analysis. This common problem arises when multiple indicators of the same type are applied to one chart. This leads to redundant signals creation that can be misleading. Don't apply multiple indicators of the same type in a single chart. Some traders do that with an expectation of finding confirmation for an expected price move. By doing this other variables become less important and accurate evaluation of market conditions also become difficult.

There are lots of indicators that are used in mt4 for various purposes some of them are listed below

• Accelerator oscillator

• Accumulation/distribution

• Alligators

• Average directional movement index

• Average true range awesome oscillator

• Trend

• Oscillator

• Volume 

These are the main custom indicators used in mt4 according to their peculiarities they can be divided into other branches.

Accelerator oscillator

Price is fluctuating according to the market movements. Acceleration Technical Indicator measures acceleration and deceleration of the current driving force. Until the price starts changing its direction it starts accelerating in the opposite direction before the market driving force changes its direction, the acceleration of driving force must slow down and reach nil. Before the change in driving force AC indicator will change its direction. As a result before the price it change its direction. If you realize that as a result of earlier warning the Acceleration/Deceleration occurs then it is an evident advantages for you. 

Accumulation distribution

The calculation of accumulation distribution is done by first calculating the money flow multiplier, and this money flow multiplier is then multiplied with the periods volume. This is a momentum indicator used to identify the divergences between stock price and volume flow. Based on investors accumulation on a certain stock this indicator measure supply and demand. 

Alligator

Alligator indicator is introduced by Bill Williams in 1995. This indicator was developed to help traders to confirm market trend and direction. It includes three lines overlapping on a pricing chart. These three lines indicate the jaw, the teeth and the lips of the monster. The Alligator indicator works best when combines with a momentum indicator then it can also help traders to point out impulse and corrective wave formations. The Alligator indicator is compiled with three smoothed moving averages. The Alligator indicator helps the traders to stay in their position for a long time.

Average Directional Index 

The Average Directional Index measures trend strength without regard to trend direction. The other two indicators are +DI and -DI. By defining trend direction, Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) complement ADX.

It quantifies the strength of the trend regardless of whether it is up or down since ADX is non-directional. The average directional index is a technical analysis indicator used  to identify the strength of a trend. It usually plotted In a chart window  with the DMI (Directional Movement Indicators).

Average True Range Technical Indicator

Average True Range Technical Indicator (ATR) is used to identify the volatility of the market. It shows market volatility. You can use this indicator as a factor of several other indicators and trading systems.

Owing to panic selling if a sheer fall in prices occurs ATR can often reach a high value at the bottom of the market. And at the top of the market and during consolidation indicators will shows low values which are typical for long duration of sideways movement. Trend change can be identified in the following way if the indicator value is high, then the trend change probability is higher. 

The best FOREX trend indicator in the world that works in MT4 consists of a zero line, a green bar, and a red bar. If the green bar is above the zero line it shows the current true trend is up similarly if the red bar is below the zero line it indicate the True Trend is down. The trend, oscillator, volume are the indicators that have sub divisions they have its own specification. The variations are clearly found by its own branches. The main indicators are used in the Mt4 platform are described and the further details about other indicators are in next article.

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