The Relative Strength Index shows the magnitude of the recent price movements. The RSI shows the strength of the market move in one direction or the other.
This indicator shows the momentum of a trend. It shows when a current trend may be over bought or over sold.
The MACD is a trend following indicator that helps identify the strength of a trend or a change in trend.
Bollinger bands have a number of valuable uses. Whether it is following trends or looking for possible entry and exit points. Understanding these can be very useful to FX traders.
Now that you understand how moving averages work, let’s take a look at how they are applied in real trading decisions.
Like moving averages, EMA’s allow you to identify trends a little earlier. They give extra weighting to the more recent move.
Like trend lines, moving averages help identify trends in the market and assist with changes in direction and trade entry.
You have got the basics discussed in the first few videos. Now combine them to to develop your trading strategy.
The use of channels can allow you to trade long and short while a market is trading in a defined channel.
Identifying trends can help avoid traders from entering trades against the trend the market is taking. The old saying goes … “the trend is your friend.”