In my experienced I also search for many trading systems and forex trading indicators and made some back test in the demo account. Over and over again I tried so many trading techniques and indicators like Fibonacci, Relative strength index, Bollinger bands indicator and etc. You will find thousands of indicators that available for free in the internet and hundreds of forex trading systems.
In this article I want to share about my experienced for you, maybe you can learn and get benefits from it. But, do you ever wondered about why there are so many forex technical indicators that available in the internet? here is the small explanation. Before 1980, the traders had no access to the international forex trading market and at that time many banks and big companies hard to make transactions with big volume. This issue also happened on the stock trading market.
After the invention of the internet, then the number of internet users increased in the 90s gave the chanced to improve the liquidity in the forex trading market and the active traders in it.
Banks and other trading companies with big trading capital and huge trading orders from international companies usually need more market participants on the another part of their trade activities.
For instance, the Japanese company Toyota wants to change by car sales in the USA occupied US dollar in the Yen Japanese to pay their workers in Toyota factory, and there are big money from one currency must be changed to another currency.
For example when Toyota needs 500 million US dollar to change at the newest price in Yen. In this situation, bank need to find other market dealer who is willing to buy big sum of dollar to generate Yen.
Regarding on this market situations, it was usually very hard to change big trading in the market, that because the banks and companies had among themselves exclusively trading.
Now, how can the banks make the trading market become more attractive for the traders to provide more active in buying and selling.
The trader open a trading account or invest the money generally not understand. So it was the job of the banks to all traders who invest in forex trading market to generate trading tools, on which they can make trading systems. In this situation, forex trading indicators come into play.
Let's talk about Moving average indicator and other trend trading indicators.
Moving average indicator is the most popular forex technical indicator. This trend indicator formulates the average of the last x trading prices and show the result on one indicator line in the forex trading chart.
The moving average indicator can give you entry and exit trading signals. and here are the trading rule.
Open buy trading position when the moving average move higher and we can open buy trading position when the market price coming from above and touches the moving average line.
Open sell trading position when the moving average move lower and we can open sell trading position when the market price coming from below and touches the moving average line.
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