It’s common for traders to forecast where prices are headed. There are a few who really excel at it. They were able to make educated guesses based on an analysis of price charts. Knowledge like this can only be gained through practice. Those traders have put in their time and studied the market to become experts. Consequently, they have a solid understanding of the market and how it functions.
On the other hand, this is easier said than done. The truth is that no one can forecast with any degree of certainty which way the market will go. The future is fraught with uncertainty. Forecasting price movements is like trying to read the minds of a million different traders.
This is done methodically by the FX Forecaster indicator. Traders can use this data to figure out where the price is headed, in what direction, and when to enter a trade. Here, you’ll learn about the FX Forecaster Indicator and how you can put it to use in your own trading.
What is the Fx Forecaster Indicator?
FX Forecaster is a bespoke indicator that gives you the long-term and short-term pulses of a trend’s direction. It’s a variant of the well-known MACD technical indicator. It is a histogram-based oscillating indicator. This oscillator is different from others because it shows two changing histograms on one chart. The longer trend is shown by one histogram, while the shorter trend is shown by the other.
The data is also shown as a purple and black histogram. You can use this oscillator to take advantage of short-term changes in prices when you trade. So, intraday traders and scalpers who want to try and take advantage from small price changes migth think about using this strategy.
Histogram bars can swing freely from positive to negative and back again. A bullish trend is shown by rising bars, whereas a bearish trend is represented by falling bars. The bars’ passage over the centerline serves as a trading signal. There are two sets of bars, so traders may also take advantage of the crossover between them. This is analogous to making trades based on the intersection of two moving averages.
Fx Forecaster Indicator Strategy
This trading strategy is a trend-following method that uses short-term trend pulses that move in the same direction as the longer-term trend to signal trades. A 50-period exponential moving average (EMA) line will be used to determine the direction of the trend. To determine the trend’s direction, just look at the 50 EMA line’s slope. It would also act as a moving support or resistance level that prices should generally stay inside.
The long-term trend should be shown by the purple histogram bars in the FX Forecaster. They should point in the same direction as the 50 EMA trend. Depending on the trend’s direction, the bars should remain consistently positive or negative. Then, based on the short-term pulse, the entry signal would be the violet bars on the FX Forecaster indicator, which show the short-term trend histogram. As the trend moves, the violet bars should make a crossover with the purple bars.
Buy Signal
- Watch for a breakout above an important level of resistance.
- Once the price breaks out, you must confirm that both the purple and black histograms are above zero.
- If they are above zero, place a buy order.
- Exit the position when any portion of the histogram (black or purple) falls below zero.
Sell Signal
- Wait for a breakout below a key support level.
- Once the price breaks down, you must confirm that both the purple and black histograms are below zero.
- If they are below zero, place a sell order
- Exit the position when any portion of the histogram (black or purple) rises above zero.
Fx Forecaster Indicator Pros & Cons
Pros
- Quick-moving and effective in revealing recent price movements.
- Its data could offer more dependability and applicability
Cons
- More susceptible to causing deception and sending false signals.
- This indicator is a lagging one.
Conclusion
One tool that can help you spot trends in the financial markets is the FX Forecaster indicator. As a result of this, you can use it to time the beginning and end of your positions while trading any instrument. It can also be used with support and resistance lines to help time your traders better. As with all fx strategies, you might want to test it on a demo account to begin with and see how things go.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
