Forex Trend Indicators


One of the main tools for traders while doing technical analysis in Forex market are trend indicators. This set of indicators as a result of its inertia is often used during a trending market to indicate the direction of price movement.
Most of Trend Indicators of the group are calculated from averages and smoothing the price series. While in form this type is a lagging indicator, that is, indicates the trend in the past and present, with the help of trend indicators it’s possible to avoid a lot of false signals, and predict the emergence of new trend in the market.

Average Directional Index (ADX) is a technical indicator developed by Welles Wilder to estimate trend strength and determine probable further price movements by comparing the difference between two consecutive lows with the difference between the highs.

Moving Average is a technical analysis tool that shows average price over a given period of time, which is used to smoothen price fluctuations and therefore to determine trend direction and strength.

Moving Average of Oscillator (OsMA) is a technical analysis tool that reflects the difference between an oscillator (MACD) and its moving average (signal line).

Parabolic is a trend following indicator developed by Welles Wilder and designed to confirm or reject trend direction, to determine trend end, correction or flat stages as well as to indicate possible exit points. The underlying principle of the indicator can be described as “stop and reverse” (SAR).

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