Video: Forecasting Trends to Trade Forex
The simplest technical indicator to use is support and resistance – the lines in a chart that show the values, above and below which an asset’s price will not usually deviate. These are the values that represent an asset’s true worth in the eyes of most investors. Too high above that and buyers will soon stop buying. Too far below it and investors realize that others will soon want to get in on the action as the asset’s price start rising again towards its realistic value.
The second most popular technical indicator is the moving average. Moving averages are computed over a specified time frame. That way, they can filter out momentary deviations from a trend and reveal those trends more clearly. The length of the time frame selected determines how strong that filter is. By superimposing a long term moving average with a short term one, you should be able to predict how stable a price trend is or even if it’s about to reverse.
Nothing beats practice – especially when it comes to Forex technical analysis. Open an account now, access one of our many trading platforms and try out our charting tools to see how easy it really is.