Forex technical analysis encompasses the use of some of a range of indicators, including momentum indicators. In this course, we will learn how moving averages can be adapted to serve as momentum indicators, as well as marking mobile support and resistance. With Forex technical analysis, we can plot multiple moving averages of different time spans on our charts, and can create a hybrid momentum indicator, the moving average crossover. We will review the two types of moving average crossovers.
The first type of moving average crossover is price crossing over or under a moving average.
The second type of moving average crossover is a shorter-duration moving average crossing over a longer, slower moving averags. Using Forex technical analysis, we will learn under what conditions a moving average crossover signals a possible momentum and trend change.
Finally, we will talk about Momentum Indicators. These are used by Forex traders, usually to resolve certain kinds of common trader dilemmas that other support/resistance indicators can’t answer. They also give traders a better idea of future price movements.
Suggested Readings:
http://www.investopedia.com/terms/m/macd.asp
http://www.investopedia.com/walkthrough/forex/advanced/level7/moving-average-strategies.aspx
http://www.investopedia.com/articles/forex/06/movingaverageexplosion.asp
