Tuesday, December 04, 2012

FX: Basic Indicators You Should Know

Goldstrike Resources (TSX-V:GSR) June 5 2012 B...
Goldstrike Resources (TSX-V:GSR) June 5 2012 Bullish Price Crosses 21 & 50 Day Moving Averages (Photo credit: Yukon Gold Cornelius)
AAT.V Nov 27 2012 Bullish MA Price Cross
AAT.V Nov 27 2012 Bullish MA Price Cross (Photo credit: TekInvestor)
If you have plans to trade forex, as it is easy now to do so, with so many ads and offers we see online every now then, then you must know at least some of the basics.

My 'must" advice is, use low leverage, preferably 1:10.  Read, and read more, practice and practice more, and DO NOT be controlled by your greed: discipline is key.

Basic 1: Moving average cross-over.

Trend cannot keep on going. Shift has to occur. Change gears when a moving average on your indicators happen! Use a longer time frame - that is why I recommended a low leverage approach!

Basic 2: Use a trend confirmation indicator.

MACD is good for this. Basic 1 and basic 2 combined, can provide you with more confidence in you trade.

Basic 3:  Profit taking Indicator

You should know when to close trade; and Bollinger bands is good for this. Or you can use fibonacci for scaling out from your long term trades.

Never trade money that you cannot afford to lose! Mistakes could happen frequently, so learn  strategies and techniques on how to get out, at least at break even, when  trapped on a bad trade.

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