Traders have many different technical indicators to choose from when analyzing the FX market. This virtual cornucopia of options can sometimes be unsettling to some traders but does not need to be.
The important thing to remember, when practicing Technical Analysis, is to use indicators that work well together. For example, you would want to use indicators that show both potential levels of support/resistance with one that might show oversold/overbought levels so that both indicators work together to confirm an entry point.
The following EUR/CHF daily chart shows and ideal entry point by the use of complimentary indicators. The price action traded below but failed to close below the 1.5975 level creating a spike low. This simple candlestick pattern would be a confirmation that this old resistance level is acting as new support. By combining the use of an oscillator with this support level we can begin to see an ideal trade opportunity. The spike low confirms the new support level while the RSI crossing back above 30 signals a beginning of a possible up trend. This combination of complimentary indictors helps traders make better trading decisions which will translate into bigger profits. Best of luck in all your trades!
