Jun 24, 2011

Forex Robot And Indicators

What is Forex Robot?
 A forex robot is a piece of software that will automatically handle the currency trading process for you, it enters and exits trades with the goal of making a profit. A lot of traders eventually switch to a piece of software like this because they are tired of entering in all these trades manually. When you’re trading manually you have to spend a lot of time each day keeping up with the market, and you have to spend a huge amount of time staying current with the trades you have active. A Forex robot can take the pain out of this process for you, eliminating the need to enter this information manually.
The majority of Forex robots will only come prepackaged with one specific way to trade. They only have one set of rules they follow, no matter what the market conditions could be, they’re built to trade strictly currency pair. Because the market is constantly changing hour by hour this can be a big problem, as each currency pair will need to be treated differently. This is why the very best Forex robot is quite different from the others, Forex experts are constantly updating the software, these people monitor the market 24 hours a day.

Forex Indicators

Forex trading can be a highly lucrative pursuit, however a trader needs to be able to interpret market information correctly in order to make the right decisions. Traders often use forex indicators for this exact purpose. There are many different types of Forex indicator, and gaining an understanding of several of the indicator methods and how to apply them is important if you want to become a well-rounded trader.
Forex indicators are used to identify and create patterns in the marketplace. The Forex market is volatile and by taking and manipulating the basic data, it is possible to create certain trading scenarios which can be profitable for you. There are thousands of specific Forex indicators broadly categorized as: trend indicators, volatility indicators, momentum indicators, volume indicators and cycle indicators.
It’s important to understand that Forex indicators are not tools to predict the market, they are in fact used to clarify price data so that the trader can identify possible opportunities which he can then exploit to make a profit. Therefore there is no right or wrong set of Forex indicators, there’s only indicators which are appropriate for the trader based on his trading strategy, risk management and money management strategy, and the trader must learn how to read the indicators in order to make successful trades.
As mentioned earlier, there are thousands of different Forex indicators and it would take too long to go through them all, so we’ll look at the main categories of indicators and exactly what they do.

Forex Trend Indicators

Trend indicators are popular amongst a lot of traders as they allow the trader to visualize trends in the market. They essentially track three types of price movement; down moves, up moves and sideways price moves. As the name suggests, a “trend” is visually plotted on the chart showing a gradual increase or decrease following the markets activity over a certain period of time.

Forex Volatility Indicators

Volatility indicators are designed to indicate the magnitude and size of price fluctuations. In all markets there are sections of high volatility and low volatility which come in waves which is why Forex charts always follow a wave pattern. Forex volatility indicators tracked the intensity of these price fluctuations and in doing so provide insights into the activity in the marketplace.

Forex Momentum Indicators

In the same way that volatility indicators track the intensity of price fluctuations, momentum indicators record the speed at which prices move over an allotted amount of time. Momentum indicators also track how strong or weak a trend is, with the highest momentum indicated at the start of a trend and the lowest at the end.

Forex Volume Indicators

These set of indicators are used to gauge investors interest in the marketplace, with a high volume of trades indicating a probable start of a new trend and low volume implying that there is little or no interest in a specific market. As volume increases, growing interest in the market also increases which can continue to strengthen an ongoing trend or may indicate the beginning of a new trend.



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