How to Spot Common Forex Signals
Trading the forex market in India is definitely rewarding. However, in order to be able to understand how to spot the forex signals you need to know how to read the technical charts. There are a number of ways in which traders analyse and then buy or sell in the currency market. There are a few popular trading strategies which are followed by the majority."
Support and Resistance
Support and Resistance is the crux of Technical Analysis. They are the likely turning points and show the zones where the demand and supply is the maximum. Whether you are an equity trader, a commodity trader or a forex trader, knowing how to identify Support and Resistance levels is a must. They let you decide on the best forex rates in which to enter the market.
Multiple Time Frame
You cannot trade the forex market by just observing a single time frame. There are different combinations of time frames that you need to analyse in order to take a high probability trade. So when a particular time frame will give you an indication of the trend, the other will let you draw the high probability supply and demand levels.
The Average Directional Index - ADX
ADX indicates how strong the forex market is. It lets you know if the current trend of the market is strong or weak. This lets you either stay in your trade or book profit.ADX is a very useful indicator mostly used by advanced and professional chartists.
Head and Shoulders
Head and Shoulders is a very well known formation that traders look for in the technical charts. This indicates a peak in the market and signals possible reversal. The pattern looks like a head between two shoulders and thus the name. This is a common forex signal that is traded.
Moving Average is a very popular tool used by traders to spot common signals in the forex market. The moving average shows the trend of the market .Most traders use two moving averages on their chart simultaneously where a cross over signals that the trend is still strong.Your broker may offer you a zero brokerage account to trade the forex market. The forex market gives you a lot of leverage. It is important that you know how to read the technical charts or get help from a professional chartist to be able to make consistent profits in the forex market.
• Equity trading basics
• What is forex trading
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