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What are forex indicators: available information for newcomers to the market

The popularity of the Forex market is constantly growing, attracting more and more new participants. However, working in this market is not easy; it requires constant analysis of vast amounts of information to make the right decision.

To facilitate the work on tracking and analysis of prices in the market and were created indicators Forex.

What are Forex Indicators

Forex market indicators are specially developed programs, which are designed for:

  • Reading charts,

  • Tracking the market situation,

  • To help you make an informed decision.

Forex indicators allow calculating mathematically probable price operations for a time. A trader no longer needs to calculate indicators manually - the indicator program automatically does it all. The market participant only has to analyze the received data and act following the decisions made. However, the indicator can advise when not to trade or vice versa when to enter the market.

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Types of Forex Indicators

Many indicators can be classified as follows:

  1. The trend indicators are designed to confirm or refute current market trends. They focus on divergences that are present in charts and make predictions about price processes in the Forex market.

  2. Inertia indicators (or oscillators) are the most popular, but the most simplified. They measure the speed and magnitude of price movements and based on these data, analyze price behaviour shortly.

  3. Psychological indicators study market sentiment and predict possible actions of market participants.

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How to use Forex market indicators correctly

Although Forex indicators are an excellent tool to help traders, especially beginners, to obtain and analyze different information about the market, it is recommended to use several indicators, as they can sometimes produce inconsistent results.

Currently, there are a lot of indicators on the market, which are, by and large, identical programs. Their main difference from each other is the constant updating of previous versions and adding new algorithms and improvements, the purpose of which is even more accurate analysis of information.

Since a good indicator is not cheap, before purchasing it is necessary to study the principle of its work, its advantages and disadvantages, to read the feedback of users and only after that make a decision about purchasing.

Experienced market participants do not blindly trust the results of indicators and always remember that the best tool for successful Forex trading is a cold head and sober calculation.