Last update 2020.10.13
Talk to 10 different fx traders and ask for the best forex trading indicators, and you’ll likely get 10 different answers. It can be confusing to a less experienced trader and sometimes even professional traders get embarrassed with the variety of forex indicators 📊. Once it’s not an easy task, in this article we will share with you some of the best forex trading indicators to use to help you.
🎯 We hope to help you invest in forex and improve your results. You can also get extra forex trading insights from leading finance experts on our trading Academy and on our free forex Telegram channel.
💹 When investing in forex, we suggest you consider long term results.
What you will learn ahead🎓
- Understanding the forex trading indicators
- The most trading indicators
- How to use AI to trade forex and take advantage of the market
- What are the best forex brokers to trade
The best forex trading indicator. Does it exist? 🧐
Perhaps we can break the task down into a simple set of four basic technical indicator types that can be used in combination to get in at a great price.
No one indicator is best for everyone in this classification, but an indicator that helps a trader cut losses short and let profits run is the best indicator for that trader.
A typical model made of four groups of trading indicators could be:
- (1) Trend following.
- (2) Trend confirmation.
- (3) An overbought/oversold tool.
- (4) A tool that tells you when to get out (either for profits or stop losses).
It is important to understand that each of these indicator types generates lagging indicators. This means they give you trading signals after the move has already started so what they forecast is not price direction, but rather trading opportunity.
However the trading signal is only an opportunity if the trader manages their risk properly.
So for example, a popular trend following indicator is a moving average. Even with this one indicator, there are literally hundreds of different choices, how long or short the time horizon is, and whether it should be exponential (meaning giving more weight to the most recent periods) or one that gives equal weight to every period.
Traders looking to get in a little quicker choose exponential moving averages with shorter time frames but take the risk of false trading signals. As long as traders follow their risk rules and stop out of trades when the signal comes, they can find profitability over many trades.
So if the moving averages are bullish (or bearish), the trader then looks to an indicator like the MACD to confirm the bullish signals of the moving average. Yet even here there is a dizzying array of choices to select from.
A popular overbought/oversold trading tool is the three-day relative strength index (RSI). This tool basically adds up all the days that end bullishly and compares them to those that ended bearishly over the time period measured and displays the information in a range from 1 to 100.
If all the days are bullish, the indicator will approach 100 while if all the price action is bearish, the RSI will head towards zero. Price action is considered neutral if the RSI is at 50.
All of the previous indicators are used to find entry points. The trade could choose to simply set percentage targets (both for stop-loss or profit-taking orders).
Or they could use forex trading indicators from among the types listed here to help them determine exits. Or they could use yet another indicator like Bollinger Bands to help them forecast their exits.
Bollinger bands take a standard deviation of price movement over a period of time, adding and subtracting it from the average closing price over that same period to create lines above and below the price movement of the chart. These lines are known as “bands” which sometimes are far apart and at other times get much closer together in a squeeze play.
There are some people who might enjoy spending the time it takes to really learn all these indicators and use them on their charts. But the vast majority of people are busy living their lives and would rather have an easier solution that doesn’t require as much time or effort but still gives the same opportunities.
Wiseinvest’s AI trading is the perfect solution. It watches the entire market for signals on 40 different strategies, trading automated for you with forex partner brokers. You can also trade manually with AI forex signals, which send you ready-to-go trading signals when it’s time to get in or out of a trade. What’s even better is that it’s on pace to generate a whopping 51.2% return this year.
Wiseinvest’s AI gives you the best of both worlds, an easy way to put your money to work without having to become an expert on hundreds of technical indicators and strategies, and a really high return on your money in a simple to follow and quick to implement way.
The best way to trade forex with AI
You can trade automated with AI-Trading in simple steps without concern about defining trading indicators.
Automated AI trading benefits
- Setup in 3 minutes.
- Totally hands-off, from anywhere.
- Invest from just $1.
- APY of 40% over the past 13 years*.
- Lightning-fast execution & no slippage.
- No commissions, no management fees.
- Portfolio with 40 different automatic strategies.
- No MT4/MT5 or other platforms required.
- Test with a risk-free practice account.
- Trading results directly on our dashboard.
What is the AI performance in forex trading?
The Win Rate of our AI varies according to the period and can reach up to 95%. The performance is based on the efficient frontier measurement metric, which means that our model is profitable whenever the Win Rate is greater than 60%. All strategies of our AI trading system seek stable returns and sufficient results to achieve an average return of 40% per year (APY), without the use of high leverages.
We understand that what matters in forex trading is the final result. Thus, the investor needs to consider that Win Rate is not always the best metric to measure performance in forex, as other signal providers disclose. For instance, out of 100 trades, only 1 trade may be enough loss to make the 99 trades not profitable. In this case, the Win Rate would be 99%, but the final result would be unfeasible (negative).
We focus on the return of 40% of APY and not just on Win Rate.
It is essential to observe that forex brokers may charge spreads, commissions, and overnight fees in your trading account, and these factors can affect the AI performance. You can check our forex trading track record to understand more about AI trading performance clicking here.
How much do I need to trade forex with AI?
You can start in forex trading with free AI signals or AI trading account and deposit just $1 in the broker. It is also possible to test using a risk-free practice account with our AI trading system. However, in order to do efficient risk management in real accounts, we suggest you start from at least $100. Notice that some forex brokers require different initial deposits to trade forex.
What is the trading strategy of our AI?
Our AI strategy is the combination of different AI trading systems, with more than 100 features, that define 40 different strategies which simultaneously consider: Quotes of the 28 forex pairs, Supports & Resistances in different time frames, Trends and Counter-trends, Cross-indicators, Index of each pair, Economic Calendar, Investors Sentiment.
Our AI analyzes those fundamental, technical, and sentiment factors that affect forex trading, and all criteria are evaluated in real-time using different weights. After completing the analysis, the choice of the signal emission strategy is made considering the increased likelihood of short-term profit and the amount available for investment.
Using technical analysis, our algorithm considers not only the patterns of various trends, including support and resistance levels and cross-indicators, but our AI is also able to create its own real-time index for each currency pair, that is used to identify what is the best direction and target.
In relation to fundamental analysis in forex, the AI makes a correlation within the economic calendar to find news data that can affect specific currency pairs.
Learning Finance Is Critical to succeed in forex trading
Having financial skills can bring success in your professional and personal life. We always recommend learning more about finance and trading. This is why we founded the free Trading Academy. It is also important to keep up to date on the most important economic news from reliable sources of financial information. Our automated AI trading system is able to analyze economic news from Bloomberg, Forbes, and the New York Times in real-time, in order to evaluate the impact of forex trading.
How long should I hold my investments?
Warren Buffett says if you don’t feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes. Even during the period he called the “Financial Pearl Harbor,” Buffett loyally held on to the bulk of his portfolio. This reinforces the importance of being patient when using our AI trading solution. 😉
- No one forex trading indicator is best for everyone, but an indicator that helps a trader cut losses short and let profits run is the best indicator for that trader.
- A typical model made of four groups of trading indicators for forex could be: trend following, trend confirmation, an overbought/oversold tool, a tool that tells you when to get out (either for profits or stop losses).
- Due to a wide variety of existing Forex brokers, starting to trade Forex has become increasingly affordable.
- Wiseinvest provides the best AI trading solutions for forex. You can trade automated from just $1 through partner brokers with AI trading or manually with AI forex signals in the forex broker of your choice.
- You can get started with free AI forex signals and use a risk-free practice account.
Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.
The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. FXCM warns that 74.74% of retail forex traders lose money trading CFDs.
The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.