Forex Business - Technical Indicators.

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Key Economic Indicators

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Technical Indicators


	Moving Average


	Simple Moving Average Interpretation:

	A buy signal is generated when the currency price rises above its moving average.
	A sell signal is generated when the currency price falls below its moving average.

	MACD


	Interpretation:

	A buy signal is generated when MACD is rising above the signal line.
	A sell signal is generated when MACD is falling below the signal line.

	Volume


	Interpretation:

	Relative low volume shows indecisive expectations of the investors.
	High volume usually shows the beginning of new trend.
	High volume is often present near the bottoms of the market.

	Bolinger Bands


	Bollinger Bands Interpretation:

	Currency prices tend to stay within the upper and lower band.
	Sharp price changes tend to occur after the bands tighten.
	When prices move outside the bands, a continuation of the current trend will continue.
	Bottoms and tops made outside the bands are usually followed by bottoms and tops made inside the bands.
	A move that originates at one band tends to go all the way to the other band.

	Volatility


	Interpretation:

	High values if volatility appearing in a short time frame show an approaching bottom of the market.
	A decrease in volatility over a long period of time shows an approaching top of the market.

	Momentum


	Interpretation:

	Buy signal is generated when Momentum bottoms down and then turns up.
	Sell signal when Momentum peaks up and then turns down.
	Watch for extremely high values of this indicator (relative to its past values) - the trend will probably go further.

	On Balance Volume (OBV)


	On Balance Volume (OBV) Interpretation:

	Once a trend in on balance volume (OBV) has been established it remains in force until it is broken.
	OBV breakouts usually preceed price breakouts.
	Buy long on a positive OBV breakout and sell short on a negative OBV breakout.

	Stochastic Oscillator


	Interpretation:

	Buy when %K (black line) or %D (red line) is below 20 and sell when %K or %D is rises above 80 level.
	Buy when %K is crossing %D in an upward direction and sell when %K is crossing %D in a downward direction.

	Relative Strength Index


	Relative Strength Index Interpretation:

	RSI value above 70 usually shows that the currency is overbought and the price is likely to fall down.
	RSI value below 30 usually shows that the currency is oversold and a reverse trend may be expected.

	Money Flow Index


	Interpretation:

	Money flow index above 80 usually shows that the currency is overbought and the price is likely to fall down.
	Money flow index below 20 usually shows that the currency is oversold and a reverse trend may be expected.
	The divergence between the indicator and the price usually signals that a reversal of the price trend is expected.


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