Hello,
I am an IT guy with a lot of programming experience who recently got interested in currency trading. What are the most common indicators you guys use in your trades? Do you use several at the same time? Only when all of them show it is a good entry point, you take action? Thank you for sharing your insight.
I recommend checking out this lesson in our School:
https://www.babypips.com/learn/forex/elementary#common-chart-indicators
It might be what youāre looking for.
Hi Mate, hello again.
i think you already asked this questionā¦ right ?
anywayā¦ Just in case iām wrong.
INDICATORSā¦letās see
well. the first thought i have is this
Indicators does not just mean INDICATORS (in my way of viewing it)
let me explain
first of all as far as traditional Indies are concerned
I use the following
Heiken Ashi (3 Period ) as an Overlay on the jap candles
Heiken Ashi (6 period) as a seperate bar at the bottom of the window
bollinger Bands (2 Standard Deviationsā based on EMA)
bollinger Bands (3 Standard Deviationsā based on EMA)
Fibonacci levels
at times i use a MACD on the 1min Chart to indicate and good, fine tuned entry point
Nowā¦ that sounds like a lot, but itās not really, on the chart it actually looks pretty clean.
now beyond this, iād be lying if i said that the following were not also what i would consider indicators.
I use Confluence Pairs that correlate with the primary Instrument that iām using
(Clearly, i will not enter a trade until everything lines up)
this is also a type of indicator
I use multiple time frames at once
this is also a type of indicator
I use Economic Calenders ā¦ also an indicator (to a degree) but valuable nonetheless
I use Netdania Webstation and i follow Bloomberg news, also an indicator
I have a set trading strategy and i wonāt enter a trade unless iām certain to a very large degree that the market will do what i think it will do.
now. iām not always correct, but ā¦ honestly, i am most of the time,
and the times that iām not, i can USUALLY always either hedge my way out of it, or i can get back to even without taking a loss, but thatās rare for me
soā¦ these are my So Called Indicators
i think it pretty much outlines what i do
now. there is of course a deeper explanation to how i SPECIFICALLY use them
but ā¦ to answer the question of what indies do i use
THIS IS WHAT I USE.
Hope it helps
EDIT : a lot of people use MOVING AVERAGES, and draw support and resistance lines.
i donāt because, my Fib Levels give me support and resistance lines.
My bollinger Bands have an incorporated MA
i do however draw Trend lines from time to time and i like to draw rectangles to indicate Range Periods.
but i find a lot of people use MOVING AVERAGES and Draw Support and Resistance lines
just thought it was worth a mention
Yeah, as Martin alludes to inter-market analysis as an indicator can help.
e.g. an old relationship is Xau/Usd up, US10yr(price) up, Usd/Jpy down = risk off money markets.
In the lead up to last NFP (Dec 8yh) most guys were expecting positive numbers, that has been the trend, the expectation would be that positive NFP is positive USD - thatās the law of FA.
But thatās not what happened, you will see guys ask what happened, how is it possible to see the likelihood of such an outcome with an indicator?
2 one hour charts, both ending just before NFP release - check out the difference.
Good chance that an oscillator on Eur/Usd may have shown divergence at that time, worth checking.
EUR/USD hr1 (pre NFP):
US10YR hr1 (pre NFP):
Btw, check out the next dayās peak on Eur/Usd - any indication from 10yr?
Thank you guys for your replies!
Hi Martin, it is amazing/inspiring that you get it right āmost of the timeā. However, being right or wrong is a time variant thing I believe. Do you take profit once there are pips to grab within a short time frame? Or you have a strong idea that it is going to be more profitable over a few days time, so you see your positions go through profit, loss, profit, loss ā¦ until you are happy with the dollars earned (or you stop loss if in case the market goes against you). For the latter, it is hard to automate. By the way, thank you so much for answering every single (beginnerās) question I have asked in the community!
hi mate
hehe
i donāt answer EVERY SINGLE beginners question. Actually out of every 10 i probably answer like 2 or 3 LOL
but, Youāre Welcome anyway,
Not Really, i mean, if youāve done this for 7 years and (as a programmer you can understanding this) and if youāve STUDIED THE CRAP OUT OF IT. its not really that amazing to think i will be right at least 6 times out of 10, but itās actually a lot higher than that
Nowā¦ what i do is i trade longer term, , Days, Weeks, even Months
i do scalp from time to time but itās not really my thing, but if the opportunity presents itself i take it.
wellā¦
its not really about āThe Dollar Amount Earnedā, thatās not what i pay attention to.
i do my background research, i have a flow chart that i follow, this flow chart tells me and reminds me to be aware of risk, to check certain indicators and news reports and calenders and so on.
it also gets me to formulate opinions and ideas and MOST IMPORTANTLY TO PROVE THEM, i call this BUILDING A CASE.
actually i didnāt coin the term, i once had a guy (an institutional trader)) say to me āitās like being in court and you are saying you are innocent, YOU HAVE TO BUILD A CASE THAT PROVES ITā
soā¦ if i think, say EURUSD is going longā¦ I BUILD A CASE TO PROVE IT
Now, Whether iām right or wrong is irrelevant, the more important function here is this.
I Record myself when i trade, iām recorded on webcam and i have a screen recording of the charts (like a Picture in Picture situation) i share my thoughts with the camera and prove my case on camera
THIS SETS A SOLID TRAIN OF THOUGHT IN PLAY
now. if iām wrong , i can go back and see , ,at what point in my thought process was i flawed.
if iām right, i go back and see where i got on the right track and i try and scrutinize at what point did i go off track
soā¦ yeah, i formulate a strong idea
as for Take Profit and Stop Loss
iāll set my stop loss to 100 pips (actually when the trade starts i prefer to not have one, but i put it there anyway to be safe and i budget for 100 pips)
then when the trade gets 10 pips in profit, i will move to break even (meaningā¦ Iāll put my stop loss 1 pip in profit)
after that when iāll wait until price gets 30 pips in profit, and iāll move my stop to 5 pips in profit
then when price gets to 40 pips iāll move the stop to 10 pips in profit and from there i maintain a manual trailing stop loss of 30 pips on indexes, if itās currencies, ii leave 50 pips breathing space
the main reason why this works is
andā¦ itās very highly likely that i can Almost always (but not always) manage to get into a position of 0% Risk Regardless of how much profit is made
as for the take profit, i donāt wait for something iām happy with, I LET THE MARKET DECIDE.
so what i do is
I just let it run
so letās say i have a trade and the price is at 40 pips, Stop Loss is at 10 pips in profit (Relative to the entry) and iām going long
i maintain a 30 pips distance from the price
now if my take profit is at say 100 pips, and the price gets to say 95 pips or 90 pips
this means i will have now moved my stop loss to 60 pips (so that profit is locked in)
i will then NOT LET PRICE HIT MY TAKE PROFIT, iāll move the T/P to say 180 pips and let price chase the T/P
so, it never actually hits the T/P, all it can do is either keep going up or hit the stop loss.
but, my stop loss is in profit. so it doesnāt matter
Now, iāll usually have 2 trades running
iāll have this long term trade going and iāll have a short term trade (the short term trade will typically take profit between 15-20 pips, Iāll let it hit the Take Profit)
when it does, iāll wait for a pull back and enter another short term trade
so i always have 1 or 2 trades running and my risk is always managed, but usually the profit on the long term trade FAR OUTWEIGHS the loss (if any) on the short term trade, so the account overall never suffers a loss.
also, every time the long term trade reaches 100 pips in profit, iāll open another long term trade and start the process over, now if price keeps continuing up, its not uncommon to have 2 or 3 long term trades running
now. if the market goes against me and say hits the newest long term trade, thatās ok
because only the following can happen
or
now lets say that there is a massive move against me that takes out the top 2 trades .
well. itās ok, because the trade below the top one , opened 100 pips before the top one and if the top 1 opens at 100 pips, ,the middle one has a stop loss at +70pips. so the loss from the top one is offsett by the profit of the middle one
and letās say there is a 100 pip move against me, itās still ok
because the top trade would lose, but the middle trade would profit 70 pips the bottom trade would profit by around least +100 pips
so if all 3 trades got taken out, it simply means i can re open with a very low position and BUY again.
but what usually happens isā¦ i donāt get taken out
and what happens less usually is the top trade will hit the stop loss but not the one below it
thatās basically it in a nutshell
i do my research , i refer to indies, i use my experience and what i think will happen and i basically let the market do what it wants to do after i position myself where i want to be.
i calculate everything and make sure NO MATTER WHAT i get myself into a position of 0% Risk as soon as i i can
i hope that helps you in some way
this is not really a secret of any sort, iāts common sense in my opinion.
As forex market is the largest currency market in the world various indicators can be used by investors and traders. But the most common indicators are widely used by traders are: moving average, pivot points, candle-stick charting, etc. Again you can take the advice from the experts as I am also a mid level trader, just sharing my views.