Forex Technical Indicators - Types of technical Indicators

Forex Technical Indicators are used very extensively in the forex market. They are used across all currency pairs and across all time frames of a forex chart ranging from a weekly forex chart to even  5 minute forex charts.

But there are various Forex Technical Indicators. At a broad level, they can be categorized in two categories -

1. Leading technical indicators

2. lagging Technical Indicators.

Leading forex indicators are the ones that tell the probability of what is going to happen in the forex market such as where will the currency pair direction reverse or where will the currency pair price go to. Their examples include Fibonacci Levels , Support and resistance lines.

Typically The leading indicators are used to identify the exit points as to the points where the trades can be closed. However they can also be used to open the trades. However, that custom is less common.

 

 

The lagging forex indicators on the other hand, as the name suggests tell what has already happened in a forex market. They can be used to identify if the market is trending or is it moving sideways. Technical indicators such as Exponential Moving Average (EMA), RSI, MACD etc are all lagging indicators. These indicators are traditionally used to identify points where trade can be opened.

Remembers some indicators such as MACD, Stochastic are secondary forex technical indicators