Different Indicators for Identifying New Trends

The best forex broker and technical analyst make use of different technical indicators in order to identify new trends in the forex charts. Identifying and analyzing trends are very important because it will help you make a wise trading decision. Here are several examples of indicators that you can use for the identification of new trends:

Smoothed Repulse

This technical indicator is ideal to use on the 4 hour charts. When the EMAS cross upwards at the same time as the indicator moves above 0, it means that you have found a high probability set-up.

Supertrend

This type of indicator is one of the most effective indicators for spotting new trends. The Supertrend is very simple to use because a green line shows a bullish trend, while a red line signifies a bearish trend. With this, all you have to do is to wait for the indicator to change color. The Supertrend indicator is ideal to use on longer time frames, but not so effective on shorter ones.

Bollinger Bands

Bollinger Bands are most suitable to use to spot breakouts, but it can also be used to identify new forex trends. To spot new trends, you have to watch the middle line closely. If the price goes above the middle line, you have a new upward trend (and vice versa if the price heads below this line).

RSI

This type of indicator is commonly used to show when the market is oversold or overbought. However, it can also be utilized for finding new trends. What you need to do is to simply make a line at the 50 level because a move that goes higher than 50 usually indicates a new upward trend, while a decline below 50 normally confirms a new downward trend.

Triple Exponential Moving Average (TEMA)

The TEMA is a technical indicator that is great to use in the short term forex charts. A rising TEMA signifies a bullish trend, while a falling TEMA shows a bearish trend. Thus, if you use different colors, you can easily identify new trends.

MACD

This kind of indicator is one of the most frequently used indicators and it is another effective way for spotting changes in the trend. You can either trade the MACD crossovers or the divergence patterns. Otherwise, you can also wait for this indicator to cross above 0 (bullish trend) or below 0 (bearish trend). Through this simple method, you can actually make some significant profits in trading long-term charts.

There are many other technical indicators that you can use for spotting new forex trends, but those discussed here are some of the most effective and commonly used ones. You might also want to try other indicators, such as the Parabolic SAR, Heikin Ashi, TRIX, and Stochastics for identifying changes in trend.