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The Most Frequently Chosen Forex Indicator by Traders 2023

For those who are just starting their career as a trader, learning forex (foreign exchange) is a mandatory step. They must know various things about the world of trading. They must also determine the trading method to be used.

Actually, in forex trading, every trader must have a different method. That's fine, as long as you use clear forex indicators to spot trading opportunities.

In order to have a successful career as a trader, it doesn't matter if you copy the strategies of other experienced traders. Especially when these indicators have proven successful in the field. In addition, don't forget to continue to practice your ability to analyze market trends.

The Most Frequently Chosen Forex Indicator by Traders

So, what are the forex indicators most often chosen by traders? Check out the summary below.

The Price Action

The Price Action is often understood as a pattern of price movement. The Price Action is also often considered as a separate indicator. In this case, traders must be observant in analyzing price trends, before using other indicators. Once they have successfully read the trend, then traders can try other indicators to detect the direction of the entry signal.

For example, a trader sees that the hourly EUR/GBP chart is falling. This can be seen from the longer time frame on the chart. Based on this information, the trader should sell the currency in order to get a chance to win more.

The Moving Averages (MA)

The Moving Average is the forex indicator most often chosen by traders. The reason is, MA has proven effective in forex trading. MA helps traders to look for the highest opportunities that are aligned with the general market trend.

MA can display the result line of the calculation of the average fraction of a particular currency with a specific period. Hence, traders can take advantage of more than one MA simultaneously. The aim is to confirm market trends before it's time to look for the right moment for buying and selling positions.

The Relative Strength Index (RSI)

This indicator in forex trading is a simple oscillator. Through this indicator, traders can immediately see the currency's position in the market trend. If there is an overbought, oversold, or price reversal, traders can see it directly via the RSI indicator.

As an oscillator, the RSI raises numbers between 0 – 100. The number 100 indicates an overbought currency. The number 0 indicates the currency is oversold. RSI can be utilized equally for market trends and ranges.

RSI is very easy to read, even by novice traders. When the market trend is up, it is easier for traders to open forex trading again.

The Stochastic

At first glance, The Stochastic is an oscillator similar to the RSI. Traders can also read overbought or oversold trends through this indicator. In fact, traders can also see the possibility of a price reversal.

The Stochastic has two signal entry lines, namely %K and %D. If the %K line moves past the %D line, the trader gets a valid buy signal in line with the trend. Traders can also look for sell signals with this indicator.

The Moving Average Convergence/Divergence (MACD)

For those who are just learning forex, introduce this oscillator king. From its name, MACD uses the MA element to show changes in market moments. For this indicator, there are two things that traders must understand, namely:

Lines Related to the Zero Line

By identifying this line, traders can see the upward and downward bias that occurs in the currency.

MACD Line Upper and Lower Crosses

The red line is the marker for a buy signal, while the blue line is for a sell signal. For trend and range identification, MACD is much more effective. Once the trend has been tracked, traders can immediately set a stop below the current price before the crossover. Traders can also set a limit twice the nominal risk.

The On Balance Volume (OBV)

Well, this indicator is a bit complicated. When the market price goes up, the OBV indicator will also go up. Vice versa. When the price is falling, the OBV will also decrease. Ideally, volume confirms market trends. However, since market conditions are not always ideal, there is a possibility that the market price will remain the same even if the OBV increases.

This is the forex indicator most often chosen by traders. You can use more than one indicator in forex trading.