Forex Indicators: Bollinger Bands and Fibonacci Retracements

The Forex trading is an enthralling method of make money online, if you are eager to enter into this enthralling Forex trading platform then you must learn about the indicators that will give you information regarding the Forex trading inflows. The two important indicators are “Bollinger Bands” and “Fibonacci Retracements”.

Bollinger Bands interprets that the prices remain in the two specified ranges of upper and lower bands. The distinct feature of Bollinger bands is that the gaps between the bands diverge with the volatility of the price actions.

During high volatility that is extreme price fluctuation, the bandwidth increases and becomes more tolerant.
During low volatility, the band gaps decreases according the price action at that time instant. The bands are drawn based on the simple moving average and two standard deviations above and below one particular moving average are plotted.

These bands suggest about “sell” position when the prices are greater then moving average and close to the upper band and “buy” position when the prices are less then moving average and close to lower band.
These bands are used by Forex traders for analyzing the market position in combination with RSI, MACD, rate of change and CCI etc.

On the other hand “Fibonacci retracement levels” are a series of numbers revealed by the renowned mathematician Leonardo da Pisa in the 12th century. These number series illustrates cycles found all over in nature and when implemented to technical analysis it helps to find the loopholes if any in the Forex trade.

These levels are quite impressive way to look into the future of Forex trade that is it involves predicting changes in the Forex trends as prices close to the lines drawn by the Fibonacci study.

The prices either used to retrace significantly after a significant price action up or downward trending from the original movement.
Because when the price action retraces, resistance and support levels tends to pause closer to the Fibonacci levels.

These levels can be easily shown by relating a trend line from a high point to an apparent low point. The difference between the high and low points and their ratio can be applied to attain required retracts.

The article provides information on the Forex indicators of “Bollinger bands” and “Fibonacci Retracement levels”. These indicators help to find out the Forex trend lines and anticipate the further movement of the Forex trade.