The USD/CAD Forecast published by Thomson Reuters is showing a Mired by RSI Divergence for the US Dollar. It is easy to see why analysts would expect this to be so, as we have seen many occasions where we had speculative rises in one currency and a decline in another. And yes, we all know how slow these trades can go.
So what’s the solution? Well if you look at the numbers, they are indeed heading towards a slowdown for both pairs. But how will the US Dollar perform, when the markets are slowly recovering from the last recessionary slump?
One of the first things I’ve noticed in these kinds of situations is that the traders take to the air and cry foul on everything. It’s not just about taking profits out of something, it’s about finding new ways to trade that bring you more profits than losses. To that end, I would encourage you to give it a shot. Take a seat and observe some of the leading tools you can use to make money from currencies.
So let’s start with the indicator divergence indicator. This can be used to provide you with information about which direction the market will go in.
Fundamental indicators will be of use in terms of timing the market. A good example of this is that of the “Dow Theory”. I know some people like to use Downtrend indicators to spot such moments.
Also as with price action, there are a number of indicators available for you to use. One of the most famous is the MACD (Moving Average Convergence Divergence) oscillator. Although it’s been around for a long time, it is very good at picking up short-term price movements and can also be used to spot bottoms and tops.
There are a number of other indicators available that combine price momentum with momentum by means of Bollinger Bands. These are great for detecting short-term moves. Unfortunately, these signals are often the most difficult to use, as a lot of the time, the prices in question have already moved much further down.
Another is the Bollinger Bands Signal Line, which can also act as a trend line indicator. The problem with this is that the entire area under the line is highly sensitive to price movement and does not stand the test of time. However, it is extremely useful as a guide to identify bottoms and tops.
Price action indicators like MACD, Bollinger Bands and the others can all be used for currency trading purposes. The problem is that, as mentioned above, it can be very difficult to use for price action. And while trend lines are perfect for that, many traders find them so difficult to use that they give up completely.
Quality indicators like the Moving Average Convergence Divergence (MACD) and the Bollinger bands are much easier to use. This is especially true for the latter, as they take less time to set up and give you a sense of exactly what’s going on in the market. Some traders like to use the MACD for its easy to use charts, and the free demo version can help you get started.
The trick to using these indicators is not to forget about your individual currency price. If a currency is falling and you notice that the market is moving into a breakout point, or you see the MACD moving higher or lower, just add the moving averages together and look at the result. See how quickly the price moves if it was a different direction.
You can also use these indicators to buy and sell based on either the upcoming close, or the end of the current future time period. For example, if you were able to buy now and hold onto it, you could then sell when the price breaks out to a higher point and it will likely move faster than you thought it would.