Currency Trading: Highly Effective Trading Indicators

We all have a tendency to overthink just about everything.

We make things much harder than they really have to be.  We’re all done it.

But let’s be honest.  The simpler things are, the easier it is do just about anything, including making money.  It’s the simple strategies that allow for the best results with less stress.  In fact, many currency traders will only look at charts as a simplified way to identity patterns and opportunities, instead of being bogged down with the noise of the news.

All we want to know is if the currency is range-bound or in an identifiable trend.

Sometimes, all we have to do is draw our trend lines. 


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Look at the dollar for example.  Notice the falling wedge pattern that we’ve highlighted.  Using these lines, we can clearly identify strong lines of support and resistance, likely to remain until the pattern is broken to the up or downside.

We can also identity opportunity with 20-day, 50-day and 200-day moving averages.

When the euro breaks below the 200-day moving average for example, we know it’s time to sell.  Or when the 20-day crosses below the 50-day, we know it’s also time to sell the currency. 

Again, the simpler, the better… We’re not trying to reinvent the wheel here. All we want to do is make money the easy way and move on.

We can use something as simple as RSI and MACD agreement, too for an idea of momentum shifts.  Look at the Japanese Yen for instance.  Look at what happens when RSI touches or penetrates its 70-line, coupled with a jump in MACD, the currency bounces. 

Or, look at what happens when RSI dips to its 30-line coupled with an incredible dip in MACD (December 2016), the currency rebounded again.

We can even simply identify trend shifts with the ADX indicator. 

The ADX indicator comes with three lines: the ADX line that tells you the strength of the trend, the +DI line which shows the bullish strength (green line) and the -DI line which shows the strength of the bearish trend (red line).  As you can see, the ADX signals an uptrend when the green line is on top of the red line.  It signals downtrend when the red line is above the green line. We can see the pattern emerge here with the Australian Dollar.

Again, we’re not trying to reinvent the wheel here.  Make things easy on yourself.  Follow the trends. Identify the patterns.  Watch the averages.  Make life easy and make some money.


Learn to Trade Currencies from Veteran Traders. Apply Your Knowledge
and Skills and Get Paid To Trade! Learn How Here