There are three categories of Forex trading indicators. Technical indicators are provided by Forex platforms to enable traders make the right judgment in determining the next direction of price action while trading. This decision is crucial if the prospective currency trader is not ready to lose his money.
To get a deeper understanding of the category which each Forex technical indicator belong is like doing an advanced research on them in this business. You have to upload each to the trading chart, combine it with other indicators, trade with them and observe how they work then summarize your findings.
One fact which successful online currency traders know is that you must be ready to read, research and test run to successfully develop a unique trading system.
It is therefore important that anyone wishing to participate in edulize trading currency online must possess adequate knowledge of indicators and their functions.
The three categories listed here are my own personal opinion. If you have knowledge of technical indicators and how they work, and you think differently from my opinion, you are free to give yours. This is a free society and everyone is free to offer his or her own suggestion. No one has a monopoly of ideas.
Now back to our discussion. The three categories of indicators are as follows:
Category one: Technical Indicators That Lag behind the Price
These are the types of indicators that point to the price direction after the price action has gone beyond that position. In other words they let you know the position the price of a currency pair just moved from a few seconds ago.
One may be tempted to ask if such information is important in currency trading since it is more important to predict the next price position rather than the previous one. I say yes it is relevant because this information will help us discover the next price direction but this is of course in conjunction with what other indicators are saying about the current price position
Category two: Technical Indicators That Tag Along With Price
These are indicators that move in steps with the price action. They neither precede nor lag behind the price. They just move in line with it. On their own, this type of indicator may not look very important but in combination with other types of indicators, they become relevant source of information for us in perfecting our currency trading strategy
Category three: Technical Indicators That Lead The Price
As the title says it, these are important online Forex trading indicators. They are very important because their action hold the key to the purpose for which we participate in fx trading online. They give us clue to the next likely price position.
With this knowledge, we make correct decisions while trading. This is in combination with other relevant indicators. Since our purpose of trading Forex online is to make profit, this is very important to us.
What are the indicators that belong to each category you may ask? Now, let us get something very clear. There are almost a hundred technical indicators provided in the online currency trading chart. In my experiment with these indicators, I have only gone barely halfway. One significant thing is that these three categories stand out clearly. There is no dispute about that. To complete the categorization is the next task ahead, and the result will form the concluding part of this great information.
Emmanuel Nwaeke is a Forex trader and an online work at home person. Sharing of knowledge for others to learn and prosper is one of his greatest desires.