Types of Forex trading indicators

The technical analysis began from supervision and cataloguing of all data connected to transactions in the Forex market. In due course experts managed to allocate repeating models of behaviour of the prices and to develop the basic concepts of the analysis. The concept of a trend (movement of the price upwards, downwards or aside) is basic for the technical analysis.

Speed of change of the price - the basic Forex trading indicator of change of a direction of a trend. Change of speed, as a rule, precedes change of a direction of a trend. In a typical basic market cycle the beginning of a new growing trend is characterized by very high and constantly increasing growth rate of the price. The next months (or years) rates of growth of the price decrease, and the chart of the price becomes more flat. Growth rate of the price almost always reaches the maximum earlier, the ceiling price is rather than fixed. Further speed decreases - the price grows more slowly. Thus the chart of the momentum Forex trading indicator (i.e. the Forex trading indicator of rates of growth of the price) ceases to reach the last peaks and is developed downwards, despite of proceeding languid growth of the price. Similar process has received the name of a negative divergence. At last, at attempts of growth the price ceases to reach levels of the previous peaks - a true sign on an exhaustion of the "bull" market and the beginning of a descending part of a cycle, the market "bear". After sharp falling, but long before a minimum of the price the momentum Forex trading indicator reaches the lowest possible point. Eventually, notwithstanding what the price continues to decrease slowly, speed of the price reaches the final minimum. Values of the price can remain extremely low, meanwhile the momentum Forex trading indicator starts to grow. Movement of this sort is known to analysts under a name of a positive divergence. Its beginning marks preparation of a new growth cycle. As a rule, after the long period price fluctuations at rather low level, the prices again will start to grow, and high growth rate of the price means the beginning of the new multimonthly "bull" market which in due time will get destiny of the predecessor.

Forex trading indicators of moods function according to the theory of opposite opinion: the investors working under influence of emotions, are mistaken. Forex trading indicators of this sort are used for revealing excessive "bull" ("overbought") or "bear" ("oversold") the emissions of the price signalling on an exhaustion of a trend.

Other, not considered technical, indicators are not less useful in work with securities. Credit-and-monetary indicators, the indicators based at a level of interest rates, economic and fundamental indicators can be checked up on a material of the historical data with the help of the technique similar to what can be applied at backtesting Forex trading indicators. Technical analytics do not reject any information provided that it can influence results of trade.

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