What is the trend reversal indicator on Forex?

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To understand the dynamics of the market and use it for profit, it is necessary to learn how to use such analysis tools as indicators. They are extremely important both when entering and exiting the market. There are many various indicators – indicators of the trend, volatility, volume, and others. Let’s see what the trend indicators are.

Trend indicators

Without the knowledge of a technical analysis, it is unlikely that any of the investors in the Forex market would be able to achieve stable results in trading. According to statistics, more than 85% of traders who prefer aggressive trading, suffer losses. Haste and the desire to make a profit immediately make them often open orders at random, which is very similar to playing in a casino. The bottom line is disappointing: several transactions, possibly, will bring profit, and then losses.

To understand the dynamics of the market, you need to know how to use indicators. To learn more about them click here.

The very name indicates the use of these tools in the trending markets. Trend indicators help determine the origin, continuation, and end of the price trend. They all, through internal settings, can be adapted to trade with any asset.

The popular and most used trend indicators are:

  • Moving Average. An analytical tool that allows the investor to determine the beginning of a new trend or to confirm the continuation of an already existing one.
  • Parabolic SAR is used in different markets where there is a trend change.
  • Stripes or Bollinger lines highlight the price corridor.
  • Commodity Channel Index – the index of the commodity channel. Initially, it was developed for commodity markets, but later it was successfully applied in financial markets. Perfectly determines the upward and downward trends.

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