Nowadays, many people tend to use certain Forex currency trading software to help them in accurate Forex signal trading. While it is possible to gain huge profit from a what is macd Forex prediction software that is very accuracy, it is always better for you to know how to trade foreign currency manually and accurately. This is to enhance your knowledge and skill, so that you can make the decision whether to follow the indicators provided by the software.
Firstly and most important, you should understand the current market trend. Knowing the demand and supply of the currency pair, and the economic growth of the countries are very important to determine the winning pair in the long run. Forex currency trading is a game of patience, if you have the patience, you will win in the long run.
Secondly, you should look at both short term (5 minutes chart) and medium term (1 day, 1 week), to determine at which price you should go long or short. This is very important because after looking at the medium term, you should roughly know the possible range of the currency pair in the next few days. Then, you should decide whether you should go long or short, and find the best price using the short term chart. Many detractors will claim that the price is unpredictable and will go out of the range. However, think it in another way, wouldn’t this be a benefit for you if the price goes so high that it is out of range when you go long at a low price?
Knowing the concept that you should understand know the long term, mid term and short term trend, now you should know how to determine which price to go long or short. Generally, I use 3 indicators to help me in deciding when will there be a reversal so that I can reap the most profit out of it.
The first indicator is MACD (moving average convergence divergence), MACD is very useful in detecting possible reversal. When there is a cross between the fast and slow lines, this indicates that there will be a possible reversal soon.
The second indicator is RSI (relative strength index), RSI is used in conjunction with MACD to determine the current purchasing and selling power. A high RSI (over 70) means that the current market is over bought. If there is a cross in MACD, indicating that the price will go down, and RSI shows that the market is over bought, it is likely that there will be a reversal soon.
The third indicator used is Fibonacci retracement level. The first 2 indicators are used in accurate Forex signal trading to find reversal point, while the Fibonacci retracement level is to find which reversal is the most profitable one.