Categories of Indicators in Forex

Amaechi Paul By Amaechi Paul, 19th Apr 2012 | Follow this author | RSS Feed | Short URL http://nut.bz/10je9is-/
Posted in Wikinut>Business>Accounting & Finance

Trend is a term used to describe the persistence of price movement in one direction over time. Trends movements are in three directions: up, down and sideways.

Categories of Indicators in Forex

Trend indicator
Trend is a term used to describe the persistence of price movement in one direction over time. Trends movements are in three directions: up, down and sideways. Trend indicators smooth variable price data to create a composite of the trend. Example: Moving Average Trend Lines.
Strength indicators
Market strength describe the intensity of market opinion with reference to a price by examining the market trend various market participants. Volume or open interests are the basic ingredients of this indicator. They are significantly leading the market. Example: Volume.
Volatility indicators
Volatility is a general term used to describe the magnitude, or size, of day-to-day price fluctuations independent direction. General, change in volatility tend to lead changes in prices. Example: Bollinger Bands.
Cycle indicators
A cycle is a term to indicate repeating patterns of market movement, specific to recurrent events, such as etc. many markets have a tendency to move in cyclical patterns. Cycle indicators determine the timing of patterns. Example: Elliott Wave.
Support/Resistance Indicators
Support and resistance describe the price levels where markets repeatedly rise or fall and then reverse attributed to basic supply and demand. Example: Trend Lines.
Momentum indicators
Momentum is a general term used to describe the speed at which prices move over a given time period and they help to determine the strength or weakness of a trend as it progresses over time. Momentum is highest and lowest at trend turning points. Any divergence of directions in price and momentum is a warning of extremes and it signals an end of movement in that direction. If momentum in prices is flat, it signals a potential change in price direction. Example: stochastic, MACD, RSI.
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