All investors in the Forex market often make their trading decisions on the basis of economic and political news from around the world. The Forex market and stock market depend on the economic state of countries. Use of industrial production index is the best way to forecast the upcoming market trends. All traders use this market indicator, especially long-time traders. It makes sense because if the national economy develops, the national currency value grows and if the state of the economy leaves much to be desired, the rate of national currency automatically decreases.
What is an Indicator?
Forex indicators are the main and the most important tool used for current trends definition and their prospects for the future. These tools sometimes become extremely important for users as they are applied to forecasting the growth and falling of the Forex market, according to which they can invest and make transactions with foreign currency.
There is a set of different Forex indicators, available to participants of the market, complicated and applied by expanding Forex platforms dealers and users of the effective solution of the problems connected with currency exchange. These indicators are useful not only to beginners, but also for professional Forex traders. Here are two main Forex indicators.
Moving Averages: Simple, Exponential and Weighted
Many traders use Moving averages indicators to calculate the currency trend. This procedure is carried out and interpreted quite simply. Using this indicator, we can measure with ease average fluctuation of the price within a concrete time interval. Using this indicator data on the price smooth out so that we could make out a market trend and tendencies.
The stochastic indicator is one of the most important tools used for assessment of trends and tendencies. The main idea of this indicator consists in that the increasing price always lies close to the previous highest points, and the going down price – to previous to the lowest.