My Favourite Forex Trend Indicators
Being able to enter a position in the direction of the trend can be very profitable for your trading. If you have been in this field for sometime now, you will understand that the trend is your friend. However the problem with most traders is that they are unable to identify the trend.
Therefore I will like to share with you some forex trend indicators that I often use to help me in identifying the trend.
Here are what I usually use
1) Multiple Moving Averages – If you want to make use of the multiple moving averages to help you to identify the trend, you can do the following setup on your chart.
All you need to add is a 100EMA, 200EMA and 400EMA. If the 3 EMAs are sloping in a particular direction with good angle and separation, you are in for a good trend. However if you see the 3 EMAs flat and clustering together, you are in a period of consolidation.
If you want to know more about how to trade using moving averages, you can take a look at my previous post.
2) MACD Indicator – This is the next indicator you can use to help you to tell the trend. The setting for this indicator can be as default and all you need is to check whether the MACD and its trigger line is above or below the zero line.
If you see the 2 lines above the zero line, you are in an uptrend and if you see the 2 lines below the zero line, you are in a downtrend.
3) ADX Indicator – This indicator is not really considered a trend telling indicator. However it can be used to tell you the strength of the trend that you have obtained from the above 2 indicators.
Whenever you see the ADX pointed upward, you are in a strong trending market. Let’s say that you see the multiple moving averages pointing down with good angle and separation and you see the ADX indicator pointing up, you are in a strong trend.
The above forex trend indicators are what I usually used to identify a trend and I hope that it will be useful for you as well.