You can get dizzy looking at the many different forex indicators that are available to use. However, while you will see a lot of them being used by many forex traders, there are two that seem to slip to the back of the line for some reason when they can actually be very valuable. Getting familiar with these 2 unorthodox but easy forex indicators can make you a significantly better trader.
Every forex trader is looking for an edge and using these two forex trading techniques that can take you to the next level in forex trading. Most traders cannot avoid letting emotions take over and their greed and fear make their decisions for them. This is something that affects the value of currencies and can cause them to flip around and head into the opposite direction. There is plenty of information available on these two indicators, but here is a brief summary of exactly how you can use them.
The first indicator is the % Bullish. It will tell you the involvement of big time investors that are currently in the forex market itself. When the overall % Bullish is less than 20%, prices are oversold and they are overbought when that number is over 80%.
The ability to track the most successful traders is something that every trader should long for. What most don't realize is that the report already exists and it is totally free! The Commitment of Traders report is published by the CFTC every other week and lets you know the holdings in the futures market and is extremely useful to all forex traders.
The Commitment of Traders report will feature the positions of both hedgers and speculators alike. The difference in the two is that hedgers base their decisions on the protection of their investment and trends in the market, while speculators are trying to predict market trends and will usually end up letting their greed and fear take over their decision making. If you have not yet figured it out, trying to predict the market is very dangerous. This is the reason why speculators and hedgers are usually on different ends of the deal.
The bulk of the time, the speculators will be in error in these situations and you are easily able to identify a profitable trend in the market. After that, you will have to rely on technical analysis to let you know if the trade is a go or no go. Using both of these free forex indicators together will but you one step ahead of most market traders and can play a significant role in your success as a forex trader.