How to use the indicator like a pro trader: Indicators are nothing but a trade filter tools. Majority of the new traders don’t know the proper way to use the indicators. They overload their trading charts and makes things complex. Some of you might say indicators are nothing but a waste of time.

But if this was true no professional traders in the Forex market would have used indicators. The developers would have stopped coding EAs and indicators. Let’s learn how to use the indicators like a pro trader. There are two types of indicators. These are

  1. Leading indicators
  2. Lagging indicators

Leading indicators are most used by the short time frame traders. It gives early trading signals to the retail traders. On the contrary, the lagging indicators always give late trading signals and it’s mostly used by the long-term traders. So those who trade the market as a position trader should always use the lagging indicators. So let’s learn how do the professional long-term traders use it and make a decent profit.

Long term trader’s indicators

The long-term traders are often known as position traders. First of all, you need to find the key support and resistance level in the market. Once you have found the key levels, it’s time for you to select your indicators. Though there are many different lagging indicators this doesn’t mean you will be making a huge profit by using them. Focus on the 100 and 200 days SMA.

This indicator will give you the dynamic support and resistance level. Some of the experienced professionals often set pending orders at the dynamic level of the market but this is a little bit risky. You need to use the price action confirmation signal to execute your trade.

By using the 100 and 200 day SMA, you can also identify the trend change. If the 100 days, SMA crosses above the 200 days SMA its bullish reversal sign. On the contrary, if it crosses below the 200 days SMA its means the bears are trying to take control of the market.

So based on the crossover you can decide which order you should execute. Being a new trader you should use the Forex demo account to develop a long-term trading strategy by using the 100 and 200 days SMA.

Short term trader’s indicators

The short-term traders use a wide range of leading indicators. To be honest it’s really hard to filter out the best indicators for the scalpers. However, we will tell you about one simple leading indicators which will help you to filter out the false trade setup.

Starting from the novice traders ending with the expert traders, everyone knows the use RSI indicators. RSI stands for Relative Strength Index. If the value of the RSI indicators goes below the 30 market, you should look for buying opportunity.

On the contrary, if the value goes above 70 you need to look for selling opportunity. At times you will see this system is working excellent but you should never increase your lot size. Losing is nothing but a part of your trading profession. So never get biased with your winning trades. Always trade with low-risk exposure to save your investment.

Trading is one of the most sophisticated profession. You have to find the perfect point to have winning trades. Even after doing all the hard work, if you lose trade, never get frustrated. You need to embrace your losing trades just like the winners.

Try to find high-risk reward trade setup since it is one of the easiest way to cover-up the loss. In the eyes of trained professionals, proper risk management factors are often considered as the Holy Grail in the Forex market. So never trade with huge risk even after having the best trade setups. Try to think smart when it comes to Forex trading profession. And use indicators only as trade filter tools.

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