This category displays the most common used technical indicators in forex trading.

Average True Range (ATR) Sun, 28 Oct 2007 06:49:06 MDT  |  Written by Aboutcurrency    Developed by J. Welles Wilder, Average True Range (ATR) is a popular volatility indicator used to measure the volatility in currency pairs. ATR does not provide any information about the direction of the trend (up or down), it only provides useful info about how volatile a currency pair is. Read more...   Average Directional Index - ADX Indicator Sun, 18 Mar 2007 15:23:18 MDT  |  Written by Tom Plesk    Developed by J. Wilder, the ADX is a momentum indicator that measure the strength of the trend and can be extremely useful to determine if a trend is strong or weak. ADX doesn't tell you if the trend is going up or down, it just tells how strong or weak the current trend is. ADX is used very often as a trend-confirming indicator in MA-Cross trending systems. As a general rule, if ADX >= 25, the trend is confirmed, either up or down. Read more...   Bullish & Bearish Technical Divergences Mon, 29 Jan 2007 07:51:14 MST  |  Written by Aboutcurrency    Divergence is a term which often comes back in forex technical analysis, it occurs when the price of the underlying currency pair and the indicator move in opposite directions. A bullish divergence can predict future upturns, while a bearish divergence can predict future downturns. Currency traders make trading decisions by identifying situations of divergence, where the price of a currency pair and indicators, such as the MACD, are moving in opposite directions. Read more...   Williams %R Oscillator Thu, 25 Jan 2007 15:14:54 MST  |  Written by Kent Gerard    Developed by Larry Williams, Williams%R is a momentum indicator used to indicate overbought and oversold levels. Overbought market conditions are found at the upper band (readings from 0 to -20) and oversold conditions at the lower band (readings from -80 to -100). This indicator will work well in ranging currency markets. Read more...   Price Envelopes Wed, 24 Jan 2007 11:58:03 MST  |  Written by Liam Dun    Price envelopes consist of 2 moving averages and are plotted at a set percentage above and below a 3rd moving average. Price envelopes can be used to indicate overbought and oversold levels. Overbought conditions are found at the upper band and oversold conditions at the lower band. This indicator will work well in ranging currency markets. Read more...   Momentum Fri, 19 Jan 2007 16:31:30 MST  |  Written by Pete V.    Developed by Donald Lambert, the momentum indicator measures the difference between the current market price of a currency pair (or other instrument) and the price of the same currency pair a certain number (n) of days ago. Read more...   Parabolic SAR Thu, 11 Jan 2007 06:47:20 MST  |  Written by Tom Plesk    Developed by J. Welles Wilder, SAR stands for "stop and reverse" and Parabolic refers to the parabolic-shaped series of dots that are overlayed on the underlying currency price chart. Parabolic SAR is a very popular technical indicator used in currency trending markets to tell you where to set your trailing stops. It can help you to remove fear and greed from your trading. Read more...   DMI Indicator - Directional Movement Index Wed, 10 Jan 2007 06:39:57 MST  |  Written by Tom Plesk    Developed by J. Wilder, the DMI indicator is a trend following indicator designed to determine first whether a currency pair is trending or non trending before providing buy or sell signals in the direction of the trend. Read more...   Bollinger Bands Tue, 09 Jan 2007 18:11:01 MST  |  Written by Thomas Heck    Developed by John Bollinger, Bollinger Bands can be used to measure changes in supply and demand for the underlying currency pair. Read more...   Commodity Channel Index (CCI) Mon, 08 Jan 2007 20:32:26 MST  |  Written by Tom Plesk    Developed by Donald Lambert, CCI measures the position of price in relation to its moving average and is designed to identify cyclical turns. CCI works well in ranging markets and typically fluctuates between +100 and -100 readings. CCI is considered to be overbought at +100 readings or above and oversold at -100 readings or below. Read more...   Stochastic oscillator Mon, 08 Jan 2007 09:40:38 MST  |  Written by Aboutcurrency    Developed by George C. Lane , the Stochastic Oscillator tracks market momentum and consists of two oscillator lines, called %D and %K. Popular types of Stochastic Oscillators are: Fast Stoch and Slow Stoch. Read more...   Moving Average Convergence/Divergence (MACD) Sun, 07 Jan 2007 14:20:03 MST  |  Written by Peter Sof    Developed by G. Appel in the 1960s, MACD (Moving Average Convergence/Divergence) is a very popular technical indicator designed to identify trend changes and is often used to confirm trends in forex trading systems. Read more...   Relative Strength Index (RSI) Mon, 11 Dec 2006 07:21:37 MST  |  Written by James    Developed by J. Welles Wilder, the Relative Strength Index (RSI) is an extremely popular Price Following Oscillator as a measure of a currency pair's price relative to itself and its past performance. The RSI is fluctuating between 0 to 100, and like all other oscillators, it indicates overbought and oversold readings. Read more...   Moving Averages (MA's) Fri, 08 Dec 2006 09:19:19 MST  |  Written by Aboutcurrency    Moving averages (MA's) are one of the most popular technical analysis tools used when trading forex. The most powerful point of the moving averages is that they are trend-following in nature and there purpose is to anticipate the beginning of new trends, or to identify new trends as soon as possible after their inception. This basic but versatile tool has many important uses for traders and investors alike. Three types: Simple MA, Exponential MA and the Weighted MA. Read more...