When we start trading it is advisable for us to start with DEMO account. Why? Because you get to know the platform and all of its nuances. You are getting to know every corner of the platform and personalize it according to your liking without losing any money.
And another thing that you can do while demo trading is get to know all of the trading oscillators. You can understand what they mean and how to determine the future possible direction of your assets. And so, what oscillators do you need to turn your attention to?
1. Moving average.
2. RSI.
3. Stochastics.
4. MACD.
1. Moving average.
Moving average is one of the best trading oscillator that you can use for currency trading. Moving averages exist so that we can see existing trend without having to pay attention to consolidation or having to ignore the entirety of the chart movements. If the market is dominated by bears you can use your moving average or even several moving averages in order to correctly determine the trend and to find out when you need to go in and pull out of a trade.
Adding moving averages to your chart can help you correctly identify momentum and trading time. Although it is much better to back your moving average theory with trading signals.
2. RSI.
Relative strength index is a very simple yet extremely helpful and nifty trading oscillator. Knowing how apply it to your trades is a must in a modern trading world. In short RSI helps us determine when the market is overbought or oversold. That can help us see when the asset is going to lose and when it is going to gain price.
In other words, RSI can help us determine when we can see a reversal of the current price movement.
RSI is perfect for those who prefer to buy low and sell high. It also works perfectly with both trending and ranging market.
3. Stochastics.
In short stochastics can help you determine the same as RSI – overbought and oversold conditions of the financial market that in their turn lead to the reversal of existing trend. The uniqueness of stochastics lies in its form – two lines - %K and %D that signal about entry point.
So, traders prefer to use stochastics together with RSI. That can help them get a fuller picture on the current situation. The more oscillators you use, the better you can understand the picture and the more money you can earn and save in the process.
4. MACD.
Moving average convergence & divergence are known as kings of the oscillators. The possibility to use them in both – ranging and trending market makes them quite universal. They use moving averages to determine and single out a momentum.
It is better to pair MACD with other indicators but all and all knowing how to use them is going to make a lot of trading things much easier for you.
But, it is important to remember that although knowing how to use trading indicators is good and practically is a must, it is better to pair your knowledge with trading signals. These two go together like aged wine and good cheese. Peanut butter and milk chocolate, Bert and Ernie – perfectly.
