Tuesday, March 8, 2016

What Is A Technical Indicator in Forex

Hello there, fellow forex trader! If you’re reading this article, then you might be quite new in the foreign currency exchange market and there’s a lot of forex trading terms you are unfamiliar with. 

In this article, we will further discuss what are the “technical indicators” in forex.

A technical indicator is any kind of metrics whose value is acquired from generic price activity in a stock or asset.

Technical indicators are used in predicting the future price movement, or simply the general price direction, of an asset by looking at the previous patterns.

Some examples of common technical indicators are Relative Strength Index, Money Flow Index, Stochastics, MACD and Bollinger Bands.

Technical indicators, which are also generally called as “technicals”, are recognized by the fact that they don’t analyze any part of the fundamental business, such as earnings, revenue and profit margins. Technical indicators are largely used by active traders in the market, as they are basically designed to predict short-term movements in the price of the security. 

For a long-term investor, the technical indicators are of a little use for them, as they do not really help in analyzing the underlying business. What a technical indicator can do for a long-term investor is to help identify good entry and exit points for the stock by examining the long-term trend.

Learn more about the stock market and further understand “what is forex” by reading our educational blogs. See who the best forex brokers are, visit Wibestbroker.com to find out!

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