The trend can be up and down. If the trend is uptrend, then its price increases, and in case of a downtrend, accordingly, it decreases.
The main principle of working with trend indicators is the search for the current market trend.
What are the trend indicators for Forex?
Traders note several popular indicators:
• Moving averages.
The most common type of trend indicators. Other types of indicators were created using the moving average. This tool provides for setting the period. Moving averages can be used as a single indicator or in combination with other instruments.
• Bollinger Bands.
This type of indicator was created on the basis of moving averages. The cost lies within the range, which is formed by the curve algorithms. In exceptional cases, the price goes beyond the established range.
Bollinger Bands not only accurately show the trend, but also reveal the current position in the financial market.
• Bill Williams' alligator
The alligator consists of several elements, the main of which are moving averages that have a certain period. This type of algorithm is most efficient in the Bill Williams system. It can also serve as a standalone trading instrument. If the position of the curves is directed upwards, then this indicator shows an uptrend. The indicator lines must be in the correct order. Accordingly, if the curves are directed downwards, then a downtrend has appeared in the market.
• ADX indicator.
This type of indicator cannot be fully classified as trend indicator, but it shows not only the position of the trend, but also the strength of the trend. The tool consists of three main elements, namely: + D, -D, ADX. D types of curves during the intersection indicate the type of trend that is in the trading market at a given time.
The third type of ADX lines shows the strength level of the current trend. This line often misleads novice traders who are trying to determine the current trend using it. This indicator can disrupt the overall result of the transaction.
