Reliable Forex Indicators: the 4 Categories

Traditionally there are 4 types of forex indicators (and oscillators), each of which gives us specific information on the price trend of an asset:- TREND INDICATORS, highlights and there is a clear trend (bullish or bearish)- MOMENTUM INDICATORS, highlights the strength of a trend (bullish or bearish)- VOLATILITY INDICATORS, highlights how prices are fluctuating- VOLUME INDICATORS, shows how many operators are active on the market

As we will see shortly, some indicators do not fall into just one category, but are “hybrids” because they can fall into two categories at the same time.Thus, for example, the famous Bollinger Bands, which are very effective indicators of volatility, but at the same time also highlight the presence of a trend. We can give an example using the Plus500 webtrader: as you can see, the Bollinger Bands provide us with a clear visual representation of both the price trend (rise / fall) and how large the price fluctuations (volatility) are.

IMPORTANT CLARIFICATION. We must reiterate strongly that each indicator falls into a certain category since it provides us with information on a specific aspect (trend, volatility, volumes, momentum); we reiterate this because many traders who want to obtain an indication of market …

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