FOREX technical indicators
Using a variety of technical studies, various types of signals can be derived from FOREX charts.
The SMA (Simple Moving Average) indicates buy signals when currency prices rise above the average line.
Sell signals occur when the price falls below the moving average line.
MACD (Moving Average Convergence Divergence) studies have a signal line that is used to generate a buy signal (above the line) or a sell signal (below the line).
Volume indicators are used to determine market interest.
High volume (especially near the bottom of the market) can indicate the start of a new trend while low volume indicates investor uncertainty.
Bollinger Bands indicate potential changes in the market.
Sharp price changes tend to occur when the bands tighten while prices that touch one band tend to go all the way to the other band.
Other FOREX indicators like volatility and momentum can be used to reinforce signals provided by other sources. Taken together they form a relatively reliable source of information about how the market is behaving.
Are signals a sure thing? Of course not, otherwise we would all be millionaires.
Signals can give you good advice about which currencies to trade, but no signal service will guarantee their information is 100% accurate. Reputable services will show you their track record, however, and let you see for yourself how they have done in the past.
FOREX signals cost anywhere from $50 to $200 a month. It's up to the individual trader to decide if the cost is worth it.
Don't think that signals can take the place of trader education - they are advice, and if you don't have the knowledge to analyze the advice, you should go back to the books before using a signal service.
