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Oscillators Explained
Oscillators are a group of indicators that confine the theoretically infinite range of the price action into more practical limits. They were developed due to the difficulty of identifying a high or low value in the course of trading. Although we may have mental concepts of what is high or low in a typical day’s…
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Moving Averages: What Are They?
Moving Averages are technical tools designed to measure the momentum and direction of a trend. The idea behind their creation is simple. Price action is thought to fluctuate around the average value over a period of time, and we can expect to be able to the represent the market’s momentum by calculating if the current…
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Momentum Indicators
What is momentum? The term has a specific meaning in physics, and perhaps it is easier to understand the momentum of prices by considering an analogy. We know that the speed of a swinging pendulum will vary along the vertical axis, for example, as the pendulum moves from the bottom to the uppermost extent of…
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Larry Williams Indicators
As the name suggests, Larry Williams indicators are a group of technical tools developed and published by the renowned commodity and stock trader Larry Williams in a series of books and articles since the 80s. In this article we’ll present a brief overview of the most popular ones among the tools developed by him. The…
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What Are Forex Indicators?
Indicators are used for identifying, or even creating patterns from the chaos of the currency market. In all cases, they receive the raw market data as the basic input, and manipulate it in differing ways to create (as opposed to discover) actionable trading scenarios. The natural consequence of this description is that indicators are not tools of prediction. Instead, they are used to give order to the price data, so that it is possible for the trader to identify possible opportunities. No indicator is right or wrong with respect to the signals that it emits, but each of them must be used with an appropriate money management strategy in order to deliver the desired results.
There are many different kinds of indicators and it is not a hard task to define the tools required to evaluate the market – differing techniques can be employed as part of an effective trading strategy.
While it is important to use indicators to plan your forex strategy, it is also crucial to bear in mind the risks associated with trading and that losses are likely to occur.