Understanding the movements of Forex market is as important as the other concepts that we have covered in our previous topics. The knowledge of reading the movement of forex market will help you make predictions and know what your next move should be.
Technical Indicators to Understand the Movement of Forex Market
In order to understand the movements Forex market, there are 4 basic technical indicators that are used all over the world. We shall also study them here in this guide. These technical indicators are:
- Trend
- Momentum
- Volume
- Volatility
Trend
The trend indicators are designed to show the trend or direction of the currency being traded. The trend can either be upwards, downwards, or sideways. The upward trend is known as the bullish trend, the downward trend is called the bearish trend, while the sideways depict no clear direction.
Watch the below video for further information on “Understanding Movements of the Market”.
Momentum
Momentum is simply the force by which the market is moving in the certain direction. For example if the market is strongly moving in the upward direction, the momentum would be upwards. It can also be termed as the measure of speed at which the value of the currency is moving in the specific period of time.
Volume
Volume is a very important component in Forex trading. It is the amount of money being placed in the market for buying and selling at a certain point of time. The higher the volume, the higher would be the movement.
Volatility
Volatility is when the market has a lot of movement in it. It is the relative rate at which the price of the currency moves up and down in a certain period of time. The market is high volatile when the price moves up and down quickly in a short period of time. Similarly, if the movement of the price is slow, we can say that the market has a low volatility.
These are the four basic points to understand the movements of the Forex market. The market trends are signaled by these points or indicators that can allow you to make your next move precisely. Not only can you avoid the risks but ensure great profits in your trading career. The trading experts recommend learning about these indicators in detail so that you can know how the market is functioning at a given point of time and what your next move should be. Check out more Free & Premium Trading Indicators and boost your trading strategies with them.