what is the main indicator for forex trading?
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Tagged with: Forex Questions • indicator • trading
Filed under: Forex signals
A few years ago, an academic paper was done showing that a random walk does a better job of predicting changes in FX prices than any of the existing macroeconomic models.
Subsequent research by Lyons and Evans shows that the one variable that does a good job of predicting future short-term FX prices is order flow. Order flow is like signed volume — where the sign is determined by who initiates the trade — the buyer or the seller.
Unfortunately, the only people with access to order flow are the traders at the major banks. That puts you at a distinct disadvantage.
In the mean time, the best way to find if FX prices will go upo or down? Flip a coin.
dollars
There is no such thing. An indicator that predicts well today will probably be counterproductive five years down the road.
This said, I’ve seen some research that seems to suggest that there is a good deal of persistence in indicator performance in a shorter time frame. The researchers tested performance of multiple indicators over one-year period and used the one that performed best for the next one-year period.
there is no best indicators on the FX mkt but MAs the do well the dont predict but the follow the mkt
Trading currencies is not like trading stocks. Each currency is totally distinct and separate. Not like multiple stocks being in the same industry, where you can have an index to compare.
However, I would have to say that the most heavily watched currencies in the world would be the US Dollar and the Euro.