Fx Currency Trading

Archive for the ‘Chart Indicators’ Category

A Parabolic SAR (Stop and Recersal) on a Forex chart can tell us where a trend might be ending. This indicator places dots, or points on a chart and this indicator may show a potential reversal in Price movement.

FX Currency Trading is mostly about charts and indicators, the Parabolic SAR is a very simple and easy indicator that can be understood very quickly. On the chart below you can see  the dots or points make a shift from being under the candles on the uptrend to changing above the candles during the downtrend.

Image by Baby Pips

Just like mentioned before. The Parabolic SAR is very easy to use. Basically you buy when the dots are below the candles and sell when the dots are above the candles. Keep in mind that this indicator is mainly used on markets that are trending.

It is recommended not to use this indicator when there is no sign of a trend.

Bollinger bands are used to measure a market’s volatility. Basically , this great tool will tell us when the market is quiet or when the market is LOUD! The bands contract when the market is quiet; and when the market is LOUD, the bands expand. Take a look below on this chart that , the bands were close together when the price was quiet, but when the price moved up, the bands spread apart.

One thing you should know about Bollinger Bands is that price tends to return to the middle of the bands. That is the whole idea behind the Bollinger bounce.