7 Important Forex Trading KPIs to Watch
The forex market is extremely volatile and leveraged and therefore can be dangerous if the cost moves against your position. Therefore, it is important to use key performance indicators that will help you maximize your profits. One of the performance indicators is the time of day. Many people end up not being successful in this business because they trade at the wrong time of day. Those who are successful are reported to be trading during the latest US and Asian trading sessions or early European trading sessions.
Another performance indicator is range trading. To make a profit in this business, you need to buy low and sell high. In the event that a currency has fallen and is trading at significant support levels, this is the best time to buy it. In the event that the same currency is trading higher, you can sell it. However, you should beware of worst market conditions where the currency continues to trade within ranges that are relatively low.
The currency pair is another important factor to consider. Not all currencies act the same in this market, so you will need to know which pairs are going to be the most profitable for you. You will also need to know what time of day a certain currency pair tends to do well, for example the Japanese Yen is usually more volatile during Asian hours compared to the British Pound or the Euro as these are the trading hours in this country.
Another key performance indicator used by most forex traders is called stochastics. This is a forex market timing tool that helps you analyze the performance of the market, specifically the ups and downs. When the signal is stronger, you can go ahead and trade, but when it’s not, you’ll have to wait.
Another key performance indicator that is popularly used is the relative strength forex trading indicator index. It helps you to know the strength of the trend so that you can have an advance warning of any contrary movement. You will be able to know when the trend is still up or down so you know whether to place the trade or not.
The Bollinger Mark is another key performance indicator to watch out for. It allows you to know the volatility of the price, as well as the best time to make a trade. You simply need to understand it in order to make more profit in the forex market. It also helps you to know the areas that are in line with support and resistance to trade.
Moving averages are also very important when it comes to understanding the performance of the forex market. They help you know the best time to sell back on existing trends or upload new trades. During strong trending moves in the forex market, it is important to trail your stops behind support or resistance levels if you want to stay in the long-term trend.