The indicators

<<Indicators>>

What are indicators?

- they are special oscillating tools present already in the trading software (built in) or programmed by a expert designers helping in giving clues or confirming the trading signals.

  Indicators have a bad reputation among forex traders, as they (most of them) follow the price and not vice versa, indicators give signals according to the price action, and as the price itself is dramatically swinging, sometimes their signals are false and confusing.
However, we can get the most desired benefit from them and learn how to navigate from their cheating signals.
   
Types of indicators
indicators generally are classified into 2 groups:
those good at trend time               &                 those good at oscillation or no trend time                                                                                             
eg. moving averages                                            eg. MACD, stochastic,RSI

<<MACD>>

moving average convergence divergence, this is its long form, as it depends on moving averages its composition, what interest us is how to use this easy & effective indicator, the best usage (as i think) among MACD is the divergence detection, let's define divergence first then discuss how it works and attach some examples:

Divergence

It is an indication that the direction of trend is about to reverse, it occurs when the price is moving in a specific direction while the indicator is moving in the opposite one, and this is not prevalent, because normally both price and indicators take the same direction, so if you noticed this on your chart predict a change in the direction soon, but it is clear it needs a confirmation as any other method.

N.B:- the 2 points matched together between tops/bottoms in either the price action or the indicate itself not necessary to be successive.