Forex School

Lesson: 21 – How to use the indicators?

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How to use the indicators to Forex?

In many of the previous chapters we have studied in detail the indicators forex most commonly used by traders. The indicators are powerful tools, however it is not uncommon to have to make their weaknesses, such as moving averages in periods of range.

To learn how to achieve genuine forex analysis using only indicators, we will have to combine them, and this in order to qualify the information provided by each of them.This chapter is very application, so we will work mainly from examples.

Examples of using different indicators at Forex

How to use Bollinger & RSI indicators?
Here’s how to confirm a signal produced by Bollinger bands using RSI.


In this graph, three indicators:
1. Bollinger bands to 20 days with a standard deviation 2
2. Moving average 20 days (blue)
3. RSI to 9 days

Determine its entry point using the indicators:

Analyze the situation somewhat before the buy signal (green arrow). We see a clear upward trend shown by a moving average 20 and a bearish correction phase. From the perspective of trading trend, we will look for a point that the courts have the highest probability to bounce back and produce an upward acceleration. We can find the point using RSI and bands.

Indeed courses simultaneously are stopped by the lower Bollinger Band and RSI meanwhile come into oversold territory. Under these conditions, so we are seeing a bullish signal is validating.Furthermore, an input signal is good but the key is to know when to get out here we had two options.

Determine its exit point using indicators:

Do not want exposure to a potential rebound in the M20, it could have been possible to cut positions on contact. However gains are minimized. The second option that we favor in an entry in trend is to wait for the RSI is overbought or that the current touch the upper Bollinger band, here these two signals arrive simultaneously. So we cut our positions in this regard.

How to use the Parabolic SAR & stochastic indicators?
Now let’s see how we can exploit the parabolic SAR and Stochastic together.

Here is an example:


First you have to put things. First, our trend indicator, ie the parabolic informs us of a bear market, then between the stochastic in oversold area. At that time it would have been risky enough to enter the purchase because of the bearish movement announced by the parabolic. What we expect is a confirmation of a bullish rebound.

 It is expected to primarily an exit from the oversold zone and then passing the courses above the SAR. And so we can get in position for the closing we decided to make the change of the parabolic but other items could be considered.

Learning to use different indicators in Forex

There is no denying the usefulness of indicators, but as he must know how to use. We have seen how many pair of them in order to determine entry points and more relevant outputs. So many opportunities available to you to predict how the Forex courses and thanks to the wide range of indicators available to you.


About the author

Saimon Akash

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