- Average True Range ATR
- Bollinger Bands
- Commodity Channel Index (CCI)
- DeMark Indicator
- Envelopes Indicator
- Force Index FRC
- Momentum Indicator
- Relative Vigor Index (RVI)
- Relative Strength Index (RSI)
- Williams Percent Range
Average True Range (ATR) is a Forex indicator developed by Welles Wilder that introduced in his book, “New Concepts in Technical Trading Systems” 1978. This indicator measures volatility based on price action during a certain period. A higher ATR indicates a high level of volatility and a low ATR - low level of volatility. ATR was developed mainly for commodities markets to evaluate daily price instability. These markets are more likely to have price gaps or limit moves. Wilder created Average True Range to capture this "missing" volatility. It is obligatory to take into consideration that ATR does not provide an indication of price direction, just volatility.
Bollinger Bands is one of the most important technical tools that displaying the changes of current market volatility and it was named after its inventor John Bollinger in the early 1980s. A trader can use Bollinger Bands as a very accurate and exact indicator in any time frame. This tool has much utilization and provides traders extremely profitable signals for market entrance and exit.
The major signals from Bollinger Bands are the following three:
Commodity Channel Index CCI is a flexible indicator developed by Donald Lambert and featured in Commodities magazine in 1980. Despite the original purpose to identify new trends, nowadays CCI is extensively used to measure and evaluate the current price levels in relation to the average one. Daniel Lambert formerly developed CCI to make out repeated turns in commodities, but the indicator can successfully be used to indices, ETFs, stocks and other securities. Generally, Commodity Channel Index (CCI) measures the current price level relative to a standard price level over a given period of time.
DeMarker, or “DeM” technical indicator was introduced by Tom DeMark as a tool to make out upcoming buying and selling opportunities. It reveals the price reduction phases which usually correspond with the price highs and bottoms. It is an attempt to evaluate the exact for the basic currency pair. Traders use DeMark tool to determine overbought and oversold conditions, evaluates risk levels, and time when price exhaustion is necessary.
Envelopes technical indicator is frequently formed by two moving averages that characterize upper and lower price range levels. Traders use this technical indicator to define extreme overbought and oversold trading conditions in the FX market. Besides, the envelopes indicator may help to determine trading ranges for a particular instrument. The envelopes indicator helps to identify the entry or exit points as well as possible trend break-downs. This indicator works with other Oscillator indicator called Bollinger Bands as two encouraged dealers make the price move to the extremes.
Force Index (FRC) technical indicator is invented by Alexander Elder and measures the bulls’ power during every rise and the bearish power during every fall. It attaches the main essentials of the market information: price trend, its drops’ levels and transactions’ volumes.
The power of market trends is determined by price and volume:
Ichimoku Kinko Hyo is a comprehensive technical indicator tool published over 30 years ago in Japan by Tokyo columnist Goichi Hosoda. This indicator measures market momentum and trend. Also Ichimoku outlines levels of support and intents to measure multiple aspects of the market at once. Ichimoku Kinko Hyo indicator provides helpful directional information for traders, including clear trading signals. Traders also use the IKH to evaluate the existence and direction of a trend, as well as to provide initial and secondary support and resistance levels.
Moving-Average Convergence/Divergence Oscillator, commonly known as MACD, is a Forex technical indicator developed by Gerald Appel and based on the differences among moving averages calculated for different periods. MACD is intended to reveal changes in the direction and strength of the trend by combining signals from three time series of moving average curves.
MACD considers as a popular tool between precious metals investors due to its relatively easy-to-interpret signals.
Momentum is a technical indicator that illustrates a trend direction and evaluates how fast the price will change by comparing current and past price trends. Accordingly, the Momentum indicator is positive when the existing price is higher than the past’s price. And contrary when the current price is lower than the price in the past, so the Momentum indicator is negative.
Parabolic is a trend following indicator developed by J. Welles Wilder that helps to generate buy and sell signals. It is intended to help traders understand trend direction, accept or reject them, decide trend end and fix on the possible exit points. The fundamental principle of Parabolic indicator can be described as “stop and reverse” (SAR). Parabolic SAR is also an effective technical tool for determining where to place stop loss orders.
Relative Vigor Index (RVI), developed by John Ehlers, is a technical indicator designed to determine price trend direction. The essential logic is based on the statement that the close prices tend to be higher than open prices in a bullish environment and lower in a bearish environment.
Relative Strength Index (RSI) is an oscillator indicator developed by J. Welles Wilder that measures the speed of price changes and evaluates the strength / weakness alerts of price movements. Oscillator RSI fluctuates between 0 and 100. RSI can be used by traders for identifying the general market trends. Normally RSI is considered overbought when the indicator climbs above 70 and oversold when the indicator drops below 30.
Stochastic is an indicator developed by George C. Lane in the late 1950s to discover the speed or the momentum of price trend direction. The bullish and bearish divergences in the Stochastic Oscillator can be used to predict reversals. This indicator was the first important signal that Lane defined. If Stochastic Oscillator floats near 100 it means accumulation. And contrary, if stochastic lies near zero that indicates distribution.
Williams Percent Range (%R) is a forceful technical indicator developed by Larry Williams which determines whether the market is overbought or oversold. %R is associated to the Stochastic Oscillator. There is only one difference between them that % R has an upside down scale and the Stochastic Oscillator has internal smoothing.