This is a question that many Forex traders have wondered for a long time. It seems that there are as many opinions and answers as there are Forex indicators. My intent is not to give you and outright answer but review my two favorite Forex indicators and what they can do to improve your profit margin.
Support/Resistance Indicators
One of my personal favorite Forex indicators is the Support and Resistance Indicator. Technically speaking, these Forex indicators have to do with the levels of price on charts that serve as a barrier to the price in that direction. To break that down let me give an example. If there was resistance for a certain currency and that price went beyond the resistance level it would be said that the resistance for that price was broken and the result would be a spike in the price. Of course, support is when the price breaks below a barrier and tumbles.
Trend Indicators
Trend indicators are a great tool in the hands of a Forex trader. These indicators show the amount of price movement in a specific direction over a period of time. This indicator is one of the oldest and most reliable indicators. As they say on the market, "The trend is your friend." A trend indicator will help you see the direction that the currency or market is moving in. There are times when you have a hunch and trade against the trend but this is usually a loser's game. Trade in the direction of the trend and watch your winnings become consistent.
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