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On this page, we'll discover what are the best forex indicators that every trader must know to invest successfully in the currency market. Forex indicators are tools that are based on mathematical and statistical bases and have the purpose of providing accurate information about the future trend of the price of an asset. It is usually established on the basis of relevant factors, such as:

  • Opening price
  • Closing price
  • Minimum value
  • Maximum value
  • Volatility 
  • Volume

It is important to stress that no forex indicator alone can suggest a perfect short-term and long-term strategy. It is necessary to compare the received signals with the indications of the technical and fundamental analysis, in addition to mixing 2 or 3 forex leading indicators for a stronger and more precise signal. That is why in this best forex indicators guide, AtoZ Markets will analyze forex leading indicators, with useful tips to configure and use them profitably.

Best forex indicators list

 

Indicators ⭐️ Types of trading
Moving averages Scalping - Day trading
Relative Strength Index Scalping
MACD Scalping - Day Trading
Stochastic Scalping
Fibonacci Day Trading - swing trading
Bollinger Swing trading
Ichimoku Day Trading - Swing Trading
Parabolic Sar Swing Trading - Long Term
ADX Long Term
Pivot point Day Trading - Swing Trading

 

Moving averages

The forex is the most widely used indicator of the moving averages, for its simplicity and effectiveness once offered. Moving averages can be of 3 types: simple, exponential, and weighted. They are set in "periods" to be analyzed and therefore provide an average of the price trend that is taken into account. The most widely used trading method is to insert a fast-moving average (10 periods) and a slow-moving average (50 periods), in order to obtain the following trading  signals:

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  • When the fast MM crosses the slow one up: BUY
  • When fast MM crosses slow down: SELL

Below is a graphical example: Best-forex-indicators  We specify that the exponential and weighted moving averages will give greater specific weight to the last periods considered.

2. Relative Strength Index

Among the best forex indicators, we must mention the Relative Strength Index (RSI). Its strength lies in its simplicity of use since it is based on 2 levels: 

  • 0 - 30: oversold
  • 70-100: overbought

By measuring the relative strength of the market, our RSI will tell us whether the asset is currently overvalued or undervalued. The resulting signal is immediate: SELL in case of overbought and  BUY  in case of oversold. Best-forex-indicators-1 Being one of the forex trend indicators, the RSI oftentimes also allows you to see divergences with the actual price, thus anticipating the end of an ongoing trend.

3. MACD

The  MACD  is one of the best indicators for forex and it is made up of two parts:

  • Histogram
  • Exponential moving average

The objective of the MACD is to detect divergences with the price, thus anticipating a  reversal of the market. It's reading in the graph is also very simple: Best-forex-indicators-2 Some traders use the MACD as the sole indicator to define their trading strategy, while others use it to support other indications from technical analysis. At AtoZ Markets, we always suggest using it with other forex indicators list, in this case, the trading volumes will be very useful to confirm the buy or sell signal.

4. Stochastic

Very similar to the aforementioned RSI, Stochastic is one of the most popular technical indicators that was introduced in the 1950s with the aim of giving indications to investors about potential “profit-taking” areas. This term indicates levels at which buyers or sellers have exhausted their momentum and are therefore closing their positions to monetize. Stochastic also has a range between 0 and 100: Best-forex-indicators-3 Very popular in Forex, it accurately expresses the volatility of the major currency pairs.

5. Fibonacci

Conceived by the genius Leonardo Fibonacci, this theory indicates that everything in the universe tends towards an optimal size. The idea was also taken up by technical analysts who verified the validity of this theory and also applied it to forex trading. Very complex in its mathematical formulation, we can summarize it by saying that the perfect number for  Fibonacci is 1.618. The price within a chart will also tend to move respecting several key points, previously determined: Best-forex-indicators-4 Specifically, depending on the market momentum, there are other Fibonacci levels such as: 23.6%, 38.2%, 50.0%, 88.6%, 127.0%, 261.8% and so on.

6. Bollinger

Designed by John Bollinger, this trading indicator is excellent for delineating the range of an asset.  The  Bollinger bands  consist of three aspects:

  • Bullish standard deviation
  • Bearish standard deviation
  • Central moving average

As we can see in the graph, these 3 points clearly delimit the operational area of ​​the graph: Best-forex-indicators-4 It follows that standard deviations will act as support and resistance, a very useful value to enter the market based on rebounds or Breakout.

7. Ichimoku

Ichimoku Kinko Hyo or Ichimoku Cloud is one of the best forex indicators as it is reliable and comprehensive. Ichimoku is also one of the forex trend indicators out there. The crucial point is defined by the Kumo Cloud, a kind of Pivot Point that defines the current trend and the market context. In general, when prices are above this level, we will speak of an uptrend, as opposed to a downtrend: Best-forex-indicators-5 Also very important are the so-called Tenkan Sen and  Kijun Sen, two particular moving averages that offer market entry indications based on their crosses (bullish or bearish).

8. ADX

In the context of Forex, the ADX indicator shows the volatility of a currency pair. It offers a range within which the currency cross is supposed to continue its trend. The measurement of volatility is a technique that exposes us to the risk of high-impact macroeconomic news (Fundamental Analysis), so you should always use our ADX with the economic calendar at hand. Best-forex-indicators-6 Generally speaking, high volatility indicates a possible market reversal. Reverse speech in case of low volatility: current trend and little opportunity to enter the market.

9. Parabolic Sar

The  Parabolic Sar is one of the forex trend indicators used by investors to better define the market trend. In fact, the price above the Sar level will indicate a bull market, reverse speech in case of a price below the Sar: Best-forex-indicators-7 Defining the trend of a Trend is very important; however, this indicator offers the best when used in conjunction with other stocks such as volumes or Stochastic RSI.

10. Pivot Point

This is one of the most popular technical indicators used in forex trading: the Pivot Point. Cornerstone of the strategy based on support and resistance, it also offers very useful insights for Price Action, a very popular strategy in Forex. The Pivot Point is a very important area on the chart, as it indicates a level of price congestion that will cause a bullish or bearish push: Best-forex-indicators-8 Defining these points on the chart in the best of cases will be of great help to invest in forex profitably, in 2 ways:

  • Buy:  bullish pivot breakout
  • Sell:  Pivot Point Bearish Breakout

How to trade the best forex indicators?

As we have specified, it will be important to study each individual indicator and then mix 2 or 3 for a complete and effective long-term forex trading strategy. Many indicators are based on the definition of a price level, with trading marked by a breakout or bounce at that level. However, in forex, there are many currency pairs and it is not always possible to keep an eye on every chart. It follows that it will be useful to have tools that can help us both in the analysis and in choosing the right investment moment. Here are 3 great solutions!

  1. Trading signals

The signals are excellent allies for forex Trading: processed by algorithms and professional analysts, they analyze the market and send a notification to the Trader in real-time. AtoZ Markets offers the best signal service on the market, thanks to our experts that successfully process excellent trading signals. Free and reliable, they have been on the market for years and can also be tested on a Demo account.

  1. Automatic trading

An excellent option is to automate the investment, at least with a part of the capital destined for forex trading.  One suggestion: use Copy Trading and copy the operations of the best active traders in the forex market. The mechanism is simple, you choose the best ones and with one click you copy all their operations. In this way, we can take the opportunity to study your operations and learn directly from the best!

  1. Expert Advisors

An excellent intermediate solution is represented by Expert Advisors (EA), or forex robots that open and close transactions automatically. It will be necessary to configure our Expert Advisors and then test it in the demo to verify its ability to generate profits. Available on Metatrader,  they can also be purchased ready-to-use. We always suggest testing them and only then uploading them to a real account. 

Conclusions

AtoZ Markets has written this best forex indicators review to help traders understand the vast world of indicators and learn how to use them correctly. A complete and up-to-date forex indicators list for profitable trading. After the theory part, you should start practicing in the field! For this, you need a  Demo account where you can invest in forex with virtual money and without risk.

What are the MetaTrader indicators?

MT4 and MT5 indicators are technical analysis tools created for forex traders. In simple language, custom forex indicators are mathematical formulas that allow traders to identify what the market trends are and to use these concepts to carry out their operations. The AtoZMarkets indicator gallery includes a large number of very effective and easy-to-use custom indicates. We have received most of these tools from their own creators, and for us it is wonderful to be able to share them with all the operators in the market. If you have your own indicator creation, and would like to submit it, please contact us and we will be happy to publish it. In addition to this, when you download the MT4 or MT5 trading platform you also get some of the most popular trading indicators for free.

What are MT4 plugins or add-ons?

MT4 plugins or add-ons are visual tools that allow traders to customize their MT4 platform. By doing so, traders are able to tailor their trading platform to suit their trading needs. However, no plugin will give you a guaranteed winning result, and you need to use these tools according to your specific trading purpose. Traders often combine more than one custom forex plugin and / or indicator to create their own trading strategy.

What is Autochartist?

Autochartist is a program that can identify patterns on the charts using technical indicators from the Metatrader platform. This function monitors the markets 24 hours a day, and notifies you about trading opportunities in real time. Its software is designed to identify trading opportunities based on support and resistance levels. Some of the companies listed in our Forex Broker Directory offer Autochartists for free. To install it, you need to open your MT4 and go to the "browser" window and click on "scripts", where you can see the Autochartist text there. There are several Autochartist features that are very useful for investors. These include algorithms that automatically analyze markets, a customizable search panel, and a built-in price movement analyzer.

What are Expert Advisors or (EAs)?

Although custom indicators can be used to trade manually, some investors want to use automated trading strategies. The so-called EAs or Expert Advisors are automated trading tools. They are MT4 or MT5 programs that trade on behalf of traders according to their predetermined strategies. You will find a number of Expert Advisors (EAs) in the AtoZMarkets directory of trading tools. Download these files and paste them into the default MT4 folder for it. If you want to install them on your MT4 you can find them in the "browser" tab at the top left of your MT4. We do not recommend using EAs on real accounts if you are not a professional or advanced trader. We generally recommend traders to test their EAs on demo accounts first, and once their development is fully controlled, not think about being used on a real account. To activate or test any EA on MT4 you must always make sure that the "auto trading" function in the upper toolbar is activated, and a confirmation of this is that it has a green color. Once you make sure that the auto trade button is activated, you can drag one of the EAs from your browser windows onto your MT4 price chart. You will see the name of the EA appear on your chart, and if all is well, there will be a smiley face next to the EA name in the upper right corner of your platform.

What are the most common MT4 indicators?

Most traders will always use indicators such as moving averages or averages, the RSI indicator, the MACD, and the Stochastic as a fundamental part of their trading strategy. Also, many of the leading MT4 custom indicators are based on moving averages or RSI. There are also other indicators considered the best for investors, and among them we find the Ichimoku Kinko Hyo indicator, the Bollinger Bands and the ADX.

How can I create my own custom indicator?

You don't have to rely solely on other people's trading strategies or tools to do this. Creating a custom MT4 / MT5 indicator is similar to creating an Expert Advisor. The procedure to follow is as follows: Press F4 on the keyboard inside the MT4 platform This will give the option to open the MetaEditor screen Then on the MetaEditor screen click where it says "New" This will open the MQL Wizard Use the MQL4 wizard to create / write your custom indicator

How can I install my custom MT4 indicators?

Step 1: Download the indicator file to your computer Step 2: Open the MT4 trading platform Step 3: Click "Open Data Folder" Step 4: Open the "MQL4" folder Step 5: Open the "Indicators" folder Step 6: Paste the custom MT4 indicator in the "Indicators" folder Step 7: Restart your trading platform and you are good to go

Should you trade using indicators at all?

Before you start trying to find the perfeect indicator for your trading, you'll want to read this. Our in-house trading expert Dr Yury Safronau, PhD in Economic Sciences, gives you daily his best forex, metals, and cryptocurrencies to buy and sell right now. And it's not just based on any one indicator. His approach to trading is developed based on non-linear dynamic models, and it's achieved more than 65 000 pips of profits since 2015. And right now there are some very strong buy signals across several markets you don't want to miss. Want to see which ones? Get Trading Opportunities

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