Wednesday, August 23, 2017

The Best Forex Indicators For Newbies

November 27, 2010 by  
Filed under Forex FAQ & Latest Post


For today forex faq, I will be answering 2 questions at the same time as I find that one question per post is too slow and I have subscribers asking me for the answer ASAP.

Below are the questions for today.

I am a new person in forex, can you please tell me the best indicator to use as a beginner so as to avert lost of money during trading. Please respond to this question as soon as possible.

To me, the best indicator to use is either the 200EMA which is usually a very strong level of support and resistance or the MACD indicator which has multiple features that you can use.

For more information about these 2 indicators, you can take a look at the past post that I have written.

Although these 2 indicators are very useful, it does not have the ability to prevent you from lost of money. You need to understand that losing money is part of this trade. It is impossible to win all the time.

However if you really know how to make use of these 2 indicators, you will be able to greatly reduce those losing trade by skipping them.

Here is another question

For intraday trading, how do you know when there is sufficient volume in order to place a trade without the risk of the big volume coming in and whipping you up or down to the stop?

The big volume usually comes at the London Open session and the New York Open when the traders of these 2 countries start work and look for entry.

However, I do not think that they are the cause of those whipsaw movement that stop you out. If you are right in your analysis, most of the time you will profit from their entry as they cause the market to move quickly in your favour.

Those whipsaw movement that you are talking about should be those that comes from news release. I know of some traders who usually exit their position before a major news like the non-farm payroll is being released.

The major news release usually triggers very long candlestick formation and stop out a lot of position. Therefore if you do not want that to happen, try to avoid taking position before that important news release.

Comments

4 Responses to “The Best Forex Indicators For Newbies”
  1. jai sundher says:

    Dear Kelvin, i am new to forex trading. After entering a trade, is there anyway to find out how far the price will move up or down. Where to place “take profit”?

    • Kelvin says:

      Hi Jai

      You can do price projection if you are using trend line for your entry. If not, you can make use of the major support and resistance to take profit as the market usually get repelled by these levels.

    • Cutebabe26 says:

      Jai,

      Take Profit is by far the toughest element in trading. Easiest being spotting good set-up’s and stop loss.

      Take Profit can either be effectively done via Support / Resistance or by way of a fixed multiple of risk. I prefer the latter since S/R are made to be broken and the best trades often start with S/R but go way beyond.

      Mathematically, if your reward is always a constant ratio of risk (High Ratio), then you will be IN THE MONEY even though you may be stopped out often.

      Hope it helps
      Babe

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!