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Technical Indicators |
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Relative Strength Index/RSI
This is a momentum indicator, measuring a currency’s price relative to itself. It is both past performance and front-weighted, meaning it gives a better velocity reading. It is less affected by sharp rises or drops in a currency pair’s performance. The RSI’s absolute levels are 1 and 100. Buy signals are traditionally triggered at 30 and sell signals triggered at 70. However, savvy traders are now using 20 and 80 as their relevant buy and sell signals.
Moving Average
This is the most useful tool of technical indicators. The Moving Average is the average price of a currency at a specific point in time. Its purpose is to show trends in a smoothed fashion. A user will specify a time span between 10, 30, 50, 100and 200 days. The shorter the time span, the more sensitive/less smooth the moving average will be to price changes. The longer the time span, the more smoothed the moving average will be.
Bollinger Bands
These are envelopes which surround the price bars on a chart. They are plotted two standard deviations above and below a moving average at a fixed percentage. Since standard deviations are a measure of volatility, the Bollinger Bands adjust themselves to market conditions, widening during volatile market periods and contracting during more stable periods. Occasionally Bollinger Bands are displayed with a third line, which is the simple moving average line. The time period for this moving average is 10 days for short-term trading, 20 days for intermediate term trading and 50 days for longer term trading. Bollinger Bands do not generate buy and sell signals alone, but must be used in conjunctions with SI or MACD (Moving Average Convergence Divergence).
Moving Average Convergence Divergence (MACD)
MACD is derived by dividing one moving average by another. The moving averages are usually exponentially weighted, giving more significance to the more recent data. The MACD is plotted in a chart with a horizontal equilibrium line. When the two moving averages cross below the equilibrium line, it means that the shorter EMA is at a value less than the longer EMA, which is a bearish signal. When the EMAs are above the equilibrium line that means that the shorter EMA has a value greater than the longer EMA, and is s a bullish signal.
Stochastics
In an upward trending market, prices tend to close near their height, while during a downward trending market prices tend to close near their low. As an upward trend matures, price tends to close further away from its high, and as a downward trend matures, price tends to close away from its low. This particular indicator attempts to determine when prices start to cluster around their lows of the day for an uptrending market and when the trend to cluster around their high in a downtrending market, indicating a trend reversal is starting to occur.
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| Symbol |
Rate |
| GBP:CHF |
1.747703 |
| GBP:JPY |
155.484239 |
| GBP:USD |
1.638403 |
| NZD:USD |
0.627050 |
| EUR:CAD |
1.545998 |
| EUR:CHF |
1.516857 |
| EUR:GBP |
0.867915 |
| EUR:JPY |
134.947096 |
| EUR:USD |
1.421994 |
| AUD:JPY |
76.394373 |
| AUD:USD |
0.805000 |
| USD:CAD |
1.087204 |
| USD:CHF |
1.066711 |
| USD:JPY |
94.899879 |
| USD:SEK |
7.613010 |
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Disclimer: This website is for informational purposes only and is not intended to provide
specific commercial, financial, investment, accounting, tax, or legal advice.
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© ForexCenter.com, 2005, All Rights Reserved
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History