Forex indicators every trader should know

Today I will show you how to use the forex indicators every trader should know. 

You probably have learned a lot of forex indicators from the popular trading books, but you are still losing money.

Perhaps you will say, there must be some secret indicators! Well, I don't think so.

First, novice traders try to use many forex indicators for trading. In fact, experienced traders only use three best forex indicators. For example, the moving averages, the relative strength index and the average directional index.

Second, you have to make a checklist before trading forex.

• the moving averages can identify the direction of the trend.
• The relative strength index can decide overbought and oversold.
• the average directional index can measure the strength of the trend

Forex indicators to find entry and exit points

Now I will use the three forex indicators to decide entry and exit points.

First of all, I will write a forex trading plan.

• I will use a 200-day moving average to identify the direction of the major trend on the daily chart.
• I will use the average directional index to measure the strength of the trend on the daily chart.
• If the ADX hovered below 20, I will use the bidirectional grid trading strategy.
• If the ADX rose above 30, I will trade with the moving average crossovers.

Second, open a demo account and test my forex trading strategy.

• I will use the EURUSD to test the moving average strategy.
• I will use the EURJPY to test the bidirectional grid trading strategy.

Third, after demo trading, I will keep a forex trading diary.

In a word, forex indicators are only technical analysis tools, you can't rely on them heavily to make decisions.

Futher reading: How to Use ADX (Average Directional Index)