Most Winning Indicators in Forex
Most Winning Indicators in Forex

Indicators in the Forex market enable price movements to express numerical values ​​of the results of certain mathematical realities. While these indications can not be questioned on cause and effect, they give certain results on the graph with mathematical calculations. According to these results, you can easily identify points such as buy – sell, support – resistance. Indicators are used to base the results on intuitive results obtained by basic analyzes.

According to Forex indices, price movements are always subject to the same end result under certain pressures in the historical process. For this reason, the present situation is correlated with the fair value movement of prices. These indicators, which you will find on your trading platform away from randomness, are analysis tools that will give you the signals you are looking for.

You will be able to easily find and apply indicators with different characteristics and different names on your transaction platform, which you have performed in your investment transactions. It is possible to select any indicator you want with a single keystroke to apply it to your trading platform.

To get accurate results, you need to test the indicator groups over time and use them according to your investment preferences. You should also make daily technical and basic analysis comments, listen to experts and follow the news.

According to a survey among the indicators used in the Forex market, the five indicators that earned the most were identified. According to the research done, “moving averages” have been achieved as the most earning indicator. Of course, even if each investor’s own strategy and investment preferences will vary, these indicators are also used as indicators of the market.
Now I would like to give you brief information about these indicators:

Simple Moving Average
The moving average obtained by dividing all closing prices by the number of days in a given time slot is called the simple moving average. the calculation; It is assumed that all closings are of equal importance. In this calculation, short-term developments affecting prices in the months ahead affect the average. Because of this feature of the demonstrator, reliability is considered to be lower than the exponential and weighted moving average. It is also because of this feature that simple moving averages are more accurate to use in short walks.
We can show the calculation of simple moving average by the following formula:

“Simple Moving Averages = Closing Prices Total Value / Set Time Interval”

Exponential Moving Average
The exponential moving average is the one that gives the most accurate results among the varieties. It is a mix of simple and weighty moving averages. While putting the last days to the foreground, such as weighted averages, it does not ignore the first days as it is in simple moving averages. It is also the most commonly used method.

In the calculation, the number of days to be averaged is determined and then divided by 2 so that the exponential factor can be found. Then the simple moving average is taken for the selected number of days. The closing day value of the selected day number is obtained from the simple moving average. The result is called the exponential factor, and if the result is positive, it is added to the simple average. If it is negative, it is removed from simple average.

Exponential moving averages reveal long-term support-resistance points with a near-perfect prediction when selected for 200 days. Even if long-term approaches are not appropriate for the forex market, knowing this direction facilitates short-term forecasts.

The formula can be written as:
“Exponential Moving Average = Today’s Closing * 0.09 + Exponential Moving Average of Yesterday * Percentage Rate”

Percentage Rate = 2 / (Number of Days + 1)

Triangular Moving Averages
It is a kind of moving average that gives more weight to the days falling in the middle part of a certain period. For example; If a 12-day triangular moving average is calculated, more emphasis will be given to the 4 – 5 – 6 and 7 days that occur.

Weighted Moving Average
In simple moving average, calculating old and new prices with equal weight is wrong for some analysts. On this basis, calculations have been developed which give more importance to recent prices, and weighted moving average is one of them.

While this display is being calculated; Each new price data is multiplied by the number of days (n). The price data of the previous days are weighted by (n-1), (n-2) …. The DMI indicator is quite effective in determining the direction of movement. It is not only the direction of movement through ADZ; It also shows its power. In this way, trend follower systems are prevented from affecting the trendless markets. The DMI indicator consists of 3 sections; + DI, -DI and ADX.

The logic underlying the DMI indicator is; When the trend is upwards, the current high price should be higher than the highest price of the previous day. The opposite is true for the markets that are trending downward.
Interpretation of the DMI indicator is as follows:

  • + DI measures the power of the upward pressure.
  • -DI measures the force of the downward pressure.
  • The ADX measures the tendency of the market to trend. If there is a trend and if it continues, ADX increases. It also measures trending ability, not direction.

In this way, a more sensitive average is taken for the recent price data.

DMI Indicator (Directional Movement Index)
The DMI indicator is quite effective in determining the direction of movement. It is not only the direction of movement through ADZ; It also shows its power. In this way, trend follower systems are prevented from affecting the trendless markets. The DMI indicator consists of 3 sections; + DI, -DI and ADX.

The logic underlying the DMI indicator is; When the trend is upwards, the current high price should be higher than the highest price of the previous day. The opposite is true for the markets that are trending downward. Interpretation of the DMI indicator is as follows:

  • + DI measures the power of the upward pressure.
  • -DI measures the force of the downward pressure.
  • The ADX measures the tendency of the market to trend. If there is a trend and if it continues, ADX increases. It also measures trending ability, not direction.

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