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Lesson 5 of 8

Technical Indicators

Popular Forex Indicators

Moving Averages

The most common indicator. Popular settings:

  • 20 EMA - Short-term trend
  • 50 EMA - Medium-term trend
  • 200 SMA - Long-term trend, institutional level

RSI (Relative Strength Index)

Measures momentum (0-100). In trending markets, RSI can stay overbought/oversold for extended periods. Use for divergence signals.

MACD

Shows momentum through moving average relationships. Crossovers signal potential entries.

Bollinger Bands

Shows volatility and potential reversal points. Squeeze indicates low volatility - breakout likely coming.

ATR (Average True Range)

Measures volatility. Use for setting stop-losses that account for current market conditions.

Combining Indicators

💡 Indicator Combination

Don't use multiple indicators that measure the same thing. Combine trend (MA) + momentum (RSI) + volatility (Bollinger) for well-rounded analysis.

📋 Key Takeaways

  • Review this lesson's material before moving on
  • Practice the concepts on a demo account
  • Take notes on what you've learned
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