Forex Supply and Demand: How to Use The Indicators - ForeXposed

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Thursday, February 23, 2017

Forex Supply and Demand: How to Use The Indicators

Let’s find a solution about how to use the indicators in combination with forex supply and demand rule.
Forex Supply and Demand: How to Use The Indicators

In the image above, we can use MA 20 on the right way, i.e. after you successfully identify supply and demand areas then look, whether MA harmonious in showed a slope change in the area.

In the example above, we know that the price moves 'out of balance' of its magenta circle. When down visiting the starting point (rectangle) the main preference is ‘buy option’, and this was confirmed when the MA slope shows changes of pointing up.

In this kind of situation, at "A" point you will get the opportunity to 'buy' a relatively safe and potentially profitable.
Forex Supply and Demand: How to Use The Indicators

The chart above shows the demand area and CCI indicators window. You can ignore the fluctuations between overbought and oversold shown a lot by CCI. But notice when the price came down to visit the demand level and CCI showed the oversold conditions, this is a ‘buy signal’. This kind of rule applies not on forex trading only, but in any market.
Forex Supply and Demand: How to Use The Indicators

Once again, we see there are many reading overbought/oversold given by CCI. This is not wrong because this indicator only running as mere of his function. Whether the signal was given is profitable? It is another matter. Note, when the price drop from the supply area, the CCI directly heading to the condition of oversold and stay oversold for some period, which for some forex raders it is a ‘buy signal’.

Once again, if you are using an oscillator such as CCI indicating OB/OS as a filter, then use it on the right portion. Look at pullback prices toward supply areas and the CCI gives an overbought reading, this is a sell signal that must be observed.