Very simple but often effective is the focus on important supports and resistors in the chart, which can be used for a favorable entry. The introduction of support and resistance is often the advantage that the risk is clearly defined in the form of the stop. Because of their simplicity, support and resistance do not require a complex explanation of forex indicators, but this can be completely dispensed with.
Forex trading Signals: Support and resistance
The chart above shows the support and resistance areas in GBP/USD. For example, the third Test of the support zone in the range of 1.5250 – 1.5330 offered a forex trading signal for a long entry. The stop is clearly defined and is placed slightly below the lowest low point. The opposite situation is due to the resistance of 1.6300. A short entry with low risk can be made here.
The trade signal support and resistance is one of the most effective trade signals and is also known from English with support and resistance. By setting stops, this trade signal is recommended especially for forex traders and forex trader, who like to be safe on number.
Forex Trading signal 3: Oscillators
Forex Trading Signals: Oscillators
While moving averages deliver very good forex signals with pronounced trends, oscillators can act as good forex indicators in sideways phases. The most famous oscillators are RSI (relative Strength index) and stochastics. These indicators are part of the standard program of any good forex trading platform. RSI and Stochastics Mark Overbought and oversold areas. A RSI below 30 provides a purchase signal, above 70 is a sales signal. In the GBP/USD chart below, the purchase and sales signals in the area of support and resistance zones are clearly identifiable.
The important thing to note about oscillators is that they work very well as forex trading signals in sideways phases, but the oscillator values can remain very long in the overbought or over-sold area in marked trends. Oscillators then deliver false signals and should be ignored.
Like the support and resistance trade signal, the trading signal oscillators also belong to the frequently used trading signals. The oscillators are also better known as relative strength and stochastics. Your history gives you signals for buying or selling.
Acting systematically: linking trade signals to a strategy
Theme icon WissenMarket scanners support the assessment of the current market situation and are good decision-makers in the choice of a sensible trade signal. To be able to select the right trade signal, it is advisable to look at the functioning of the market scanners and the scanned markets from time to time and not simply accept the results data.
In addition, when a trade signal is coupled to a forex strategy, it is also possible to determine a purchase or sales decision when reaching certain top or bottom limits. Let’s refer to the Stop loss order. When linking trade signals with a strategy, one can also speak of a trading system.
In trading systems, it is important to pay attention to the trading strategy underlying the trading systems. Not only the trading strategies vary according to the online forex broker, but also the calculations of the respective reference quantities and their parameters for weighting. Here we refer to oscillators and trend.