The Best Combination of Forex Indicators

Of the most important things that trader in the Forex market must aim is to select the best set of Forex indicators, and the challenge is to integrate these indicators in a smart way. This means that the indicators should give different information types of market and to confirm each other and one of them and that does not repeat each other.

When two or more Forex indicators supply matching information on prices, this does not help to improve the trading, and while the Forex traders call this " signal confirmation ", in fact, may be the same type of data, and must be called "repeat" instead of "confirmation". When there is a risk with money, it becomes important...

If you choose technical analysis indicators in random way, it is likely that you will choose some of the indicators based on similar studies. How can you avoid this? Firstly, traders must know what types of Forex indicators they use. There are general categories of indicators, which are:

Style indicators.

Size indicators.

Activity indicators.

Volatility indicators.

Indicators of rotation.

Traders should avoid the use of lot of Forex indicators of the same category. There is also a simple way to identify similar indicators, where it is through the installation of the selected indicators on a particular table, you will be able to see the pattern is similar to the behavior of indicators, so if it rose and fell approximately at the same intervals, it is likely that they provide similar data.

This is an example Forex indicator that offers the same data:

Note that the Momentum Index, RSI indicator and final oscillator are acting both in the similar distinctive style. For quality signals, you must choose one of the three indices and exclude the rest.

This is an example Forex indicator that provides different data:

 

RSI is an indicator Momentum (activity), and the MACD indicator pattern, while the volume index belongs to the class size indicators. And each of these price indicators represents from a different perspective, a vehicle for the market study.

These simple rules are used on the selection of the best set of indicators Forex, by experts in trading in the Forex market to study the market and trading of high quality.