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Trade Forex online with indicators

Written by Martin Grippen. Visit also my Google plus site ,Facebook site.  and my blog about Forex.

When a trader enters a trading platform like PLUS500 his goal is to understand where the currency curve is right now and in what direction the price is moving in. His purpose is also to understand how far away he is from the goal where he withdraws from the trade and make a profit.

Some like to trade with indicators as they provide easy information such as when to enter a trade and when to exit from a trade. Others do not want to use them since they are grounded on historical data. This may cost the trader some pips in the beginning and at the end of a trade as there is a delay before the indicators change direction in connection to the price curve.

This article’s mindset

The mindset is to describe some of the indicators available on PLUS500 and in which market condition the indicator fit best.

Market conditions

In 30 percentage of the trading time is the market in a Trend-fowling condition; it means the prices are rising and falling as a trend. In other words the market prices are going up and down without extreme movements. The traders buy when the trend is moving in an upward direction and sell when the trend changes.

The remaining trading time is the market in a trend-fading market condition. The prices are moving up and down with some extreme movements. When the prices are at its extreme low the traders buy and when the traders are at its extreme high the traders sell. 

Forex indicators

The indicators provide the traders with information about when to enter a trade and when to withdraw from a trade. Some provide information about the trend direction; others about how strong the trend direction is. Some indicators provide also information about if the currency is in an overbought or oversold situation.

Overview

Before describing the indicators are an overview of the indicators that are included in the mindset of this article divided into a trend-following market and a trend-fading market. All the indicators are available on the trading platform PLUS500 by clicking on the f (x) button on the trading platform.

Trend-following market

Trend-fading market

Simple moving average

The Bollinger Bands

Linear regression

The stochastic Oscillator

The Parabolic SAR

The Williams %R

Simple moving average

The Simple moving average is an indicator that is best in a trend-following market. The moving average consists of a line founded on the average price in a given point over a time period.  The traders buy when the line is above the price line and sell when the line is lower than the price line. More information about the moving average is in the articles Trading Forex Online? Which Trading Strategies to Use in a Trendy and a Fading Market? and in the article Forex Online Trading? Linear Regression As a Trading Tool where the indicators Linear Regression and Simple moving average are matched at the end of the article.

Linear regression

The linear regression is an indicator that is best in a trend-following market. The linear regression line is a forecast of the price development in the coming period grounded on the present period's prices. If the line is higher than the price line the market is expected to decrease;  if the line is lower than the price line the market is expected to increase.  A change in the price trend occurs when the price line and the regression line overlap.

More information about linear regression is in the article Forex Online Trading? Linear Regression As a Trading Tool. In the article is the indicators Linear Regression and Simple moving average compared at the end of the article.

The Parabolic SAR

The Parabolic SAR is an indicator that is best in a trend-following market. The indicator determines the trend direction. The indicator consists of a line higher or lower than the price line. Is the indicator line higher than the price line is the market price increasing and if the line is lower than the price line is  the market price decreasing.

Parabolic SAR is useful as a Stop/Loss as the Parabolic SAR line stops when the trend changes and a new line is started until the trend changes once more.  

More information about the indicator Parabolic SAR is in the article Forex Online Trading? Parabolic SAR As a Trading Tool.

The Bollinger Bands

The Bollinger Bands; it is an indicator that is best in a trend-fading market. The indicator consists of three lines. The simple moving average line and two standard deviation lines; an upper and lower standard deviation line. The market participants buy when the price crosses the lower standard deviation line and sell when the price cross the upper standard deviation line.  

More information about the indicator Bollinger Bands is in the article Trading Forex Online - How to Use Bolling Bands and Stochastic Oscillator As a Trading Strategy. The article illustrates what the trader looks for when he trades with the stochastic Oscillator and the Bollinger Bands.

The stochastic Oscillator

The stochastic Oscillator or stochastic are an indicator that is best in a trend-fading market. The indicator delivers information about the market condition; is the market in an overbought  or oversold condition.  

More information about the indicator stochastic Oscillator is in the article Trading Forex Online - How to Use Bolling Bands and Stochastic Oscillator As a Trading Strategy. The article illustrates what the trader looks for when he trades with the stochastic Oscillator and the Bollinger Bands.

The Williams %R

The Williams %R or %R is an indicator that is best in a trend-fading market. The indicator delivers information about the market condition; is the market in an overbought  or oversold condition.  

The indicator is less known; it delivers the same information as The stochastic Oscillator.

More information about the indicator Williams %R is in the article Forex Online Trading? Williams %R As An Indicator In Your Trading Strategy 

The online trading platform PLUS500

The indicators in this article are all available on the trading platform PLUS500. If you want to see how the indicators work download the platform and open a free account. They offer both a demo and a real account.

The download link to the platform is at this link; More information about the platform and the bonuses (free bonus for signing up and first deposit bonus) they offer is on this link; the link includes  also a download link to the platform.

 

Want to trade at PLUS500? Just click on the trading area you are considering trading in for more info 


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Disclaimer
Trading CFDS in Forex, stocks, indices, ETFS and commodities has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to your investment in the CFDS in Forex, stocks, indices, ETFS and commodities market. Don't trade with money you can't afford to lose. Your success depends on your background, dedication, desire and motivation. Content on this website is for illustrative purposes only. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.



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