Best Foreign Currency Indicators

There are several (if not too many) different Forex indicators that people use to try and determine which way the market will go next. Many forex investors and traders learn how to use just a few in their quest for trading success. Some tools are definitely better than others, though you there are plenty of ways to win trades with just about any tool.

We should first mention the difference between a Forex indicator, a signal and a tool. Forex traders use all three to figure out whether the market is about to go up or down, an indicator is basically anything that you look for or add to your charts to give some kind of graphical clue. For example, two moving averages that cross would give the trader a clue that the market might be changing directions.

So, with the hundreds of indicators and other tools out there, where should you focus to maximize your chance for success?

Here are the top five FX indicators I use. First, I will say that I don't use any lagging indicators on my charts: the moving averages, MACD, Stochastics, etc. They are fad indicators, work for a time then they don't for a time, not reliable. What I do use is the foundational elements of the forex market, tools that always work because they are based on the market's underpinnings:

1. Fibonacci Retracements and Projections

2. Basic Chart Patterns

3. Trend Lines

4. Elliott Wave Theory

5. Price Barriers

If you are not using any or all of these tools, maybe you should talk a look at your tool belt.

Good luck in your trading!