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Technical Indicators
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Technical analysis is the process of analyzing a currency's historical rate in an attempt to determine its future price direction. It is founded in the belief that there are consistent patterns within price action, which in turn have predictable results in terms of future price action.

Apart from the common analysis of resistance/support, channel, patterns, technical indicators are the major weapons for chartist to conduct a technical analysis. Although technical indicators are purely the statistic indicators derived from the price changes in a period time, they do reveal important market information: trend direction, and oversold/overbought levels. That is why we categorize them into two types: trend indicators and oscillator indicators. The former is to identify the trend; the latter is to determine the oversold/overbought conditions.

There are hundreds of technical indicators in the trader community, but only few names among them won the widespread acknowledgment. DealStationFX supports most popular indicators in the charting features. If you are not sure how to use those indicators, please refer to the next part.

  • Default parameters

    Each technical indicator has its default parameters to gauge the time period and the number of price points being calculated. However, different currency pairs often show different characteristics in terms of daily volatility. To optimize the technical indicators, we strongly encourage you to adjust parameters according to specific currency pairs.

  • Signals generated by technical indicators may not be indicative of future price movement

    Traders tend to use overbought/oversold signal to trade a range, while taking advantage of cross signal to determine longer-term trend. The most important thing traders should keep in mind is that swing indicators might not be useful in trend market conditions, and vice versa, the trend indicators might also not useful in range-bound market conditions. Furthermore, in most cases technical indicators are somehow advance indicators or delayed indicators because of statistic formula. The timing of signal generated by indicators is not directly related to price movement. It could be much more appropriate to consider them as market psychological level. When market is hovering in the overbought/oversold level, it is easy to reverse but not necessarily. Likely, when the marketing displaying a trend, it is easy to continue showing higher high(lower low) and higher low (lower high).

  • Common use of technical indicators
    • Extreme levels as warning signals of overbought/oversold conditions
    • Price and indicator divergence
    • Key levels as support/resistance
    • Key level break-outs as signals of continuation pattern accomplished


Technical Indicators
Acceleration/Deceleration (AC)
Awesome Oscillator
Aroon
Average True Range (ATR)
Bollinger Bands
Bollinger Bandwidth
Bollinger %B
Commodity Channel Index (CCI)
DeMarker
Average Directional Movement Index (DMI)
Average Directional Movement Index Rating (ADXR)
Donchian Channel
Elliot Oscillator
Alligator / Gator Oscillator
Ichimoku Kinko Hyo
Keltner Channel
Moving Average
Moving Average Convergence/Divergence (MACD)
MACD Histogram
Momentum
Moving Averages of Oscilliators (OsMA)
Parabolic SAR
Pivot Points
QStick
Rainbow Chart
Rainbow Oscillator
Relative Momentum Index (RMI)
Price Rate of Change (ROC)
Relative Strength Index (RSI)
Relative Vigor Index (RVI)
Stochastics
Trend Overlay
Tom Demark's Range Projections
Williams' Percent Range (%R)
ZigZag