| Most Forex retail traders will use some form of | | | | account the directional movement of market prices: |
| technical indicator in their trading careers. In this short | | | | you can have highly volatile fluctuations no matter the |
| article, I'm going to review 4 of the common types of | | | | direction of the trend. |
| technical indicators. | | | | Support/Resistance Indicators |
| Trend Indicators | | | | Support and resistance indicators describe the price |
| Trend indicators indicate the persistence of price | | | | levels at which market price action tend to reverse. In |
| movement in one direction over time. Trends can only | | | | an uptrend for example, prices may tend to reverse |
| occur in three directions: up, down or sideways. They | | | | downward at resistance levels. The opposite is true |
| are one of the most common indicators used by | | | | for support levels. |
| traders today. You may have heard the phrase | | | | Support and resistance occurs due to the dynamic |
| "Trade with the trend", and that's how trend indicators | | | | interaction between buyers and sellers. |
| are typically used. | | | | Momentum Indicators |
| The good thing about trend indicators is that they | | | | Momentum is a general term that describes how |
| smooth out short-term price fluctuations (or "noise"), | | | | quickly prices move over a given time period. In |
| and enables a trader to focus on trading in the overall | | | | essence, momentum indicators measure the strength |
| direction of where market prices are headed. | | | | (or weakness) of a trend. Thus, momentum indicators |
| Volatility Indicators | | | | are often used in conjunction with trend indicators. |
| Volatility is a general term used to describe the | | | | Momentum is typically largest at the beginning of a |
| magnitude (or size) of market price fluctuations. Unlike | | | | trend, and grows weaker and weaker until the trend |
| trend indicators, volatility indicators don't take into | | | | eventually reverses. |