Forex Cycle Indicators

Choosing the best forex cycle indicator for yourself

Forex Cycle Indicator While dealing in the foreign exchange markets, we require some tools that help generate precise data about current market situations and predictions about the near future. Today you can easily find many tools and softwares that will help you in honing your forex trading skills. These softwares and code snippets are technically called indicators, they have been designed to fetch the data from forex market servers, analyze it using their inbuilt algorithms to yield usable results. While buying these softwares or popularly called forex indicators one should consider many aspects like the indicator’s reputation in the market. Moreover these indicators belong to many different categories of forex indicators available and each indicator is based on some principles and algorithms defined by the programmer. The forex cycle indicators are one such category of indicators. The basic aim of these forex indicators is to calculate the ups and downs in the prices of the currencies in the market.

In the forex market the “cycle” is the term used to indicate the repetition of the patterns of the market movement that are specific to the frequent events. Thus the forex cycle indicators arbitrate the timings of a specific market patterns. However the forex cycle indicators have a very little role to play in the technical analysis of the forex currencies. The patterns used by the forex cycle indicators are usually based on the some market events, like day counts, seasons, and market formulas, various theories used in the market, its strategies or some event sequence and so on.

We have gathered a list of the forex cycle indicators available in the market today, that are bound to help you boost your marketing skills:

  • Detrended Price Oscillator (DPO)-it is the type of the forex cycle indicators that is used to eliminate the trends in the market price. The overbought and oversold levels are easily determined by the Detrended Price Oscillator because it easily identifies the cycle.
  • How DPO forex cycle indicators work?
    The closing and the prior moving average are compared by the forex cycle indicators. They remove all the cycles that are longer than the moving average. The DPO uses the 20-period as the standard settings. Firstly the DPO oscillates near the zero level & then you take n-day DPO then it will remove all the cycles longer than the n. when DPO crosses above the zero line the long trades are indicated by this indicator. Whereas, when the indicator moves below the zero line the short trades are signaled.
  • Elliot Waves forex cycle indicators- this indicator is capable of telling what opportunities are available for the trader in the market. It tells the current situation of the market as well as what will be the future condition of the market. However Elliot waves theory is not an easy way to predict the market. It is quite difficult to understand & to forecast. The mass psychology is the main idea behind these forex cycle indicators. It is nothing but predetermining the behavior of the market. The traders using this indicator look for the prices that are close to the support & resistance level. If this level breaks the traders exit with minimum loses. But if the wave count is correct then you can earn two to five times than your risked money.
  • Schaff Trend Cycle Indicator (SCI)- it was developed by the Dough Schaff. It is a successor over the MACD indicator. It gives the more accurate speed & trends of the market. The MACD line is used in this with a redeveloped stochastic algorithm. It is one of the fastest types of the forex cycle indicators. It quickly indentifies the change in the trends and finds the faster entries as well as the exits. According to the Schaff Trend Cycle Indicator you should buy the entries when the downstream is in progress or the indicator is below the 25. When it crosses the 25-level it means it is a warning against the changing trend. So it is the time place a pending buy. Carefully observe this Schaff Trend Cycle Indicator to keep the pending buys further.
  • Wolfe waves forex cycle indicators- these indicators uses the swing trading methods. The working of these cycle indicators is based upon finding the channeling markets that are imbalance. Then this indicator counts the waves & draws the trend lines. Lastly it searches the perfect entries and then gives the precise profit targets. Wolfe waves forex cycle indicators comprise of a pattern of the 5 waves that consist of a channel in the rising or falling markets. It does not provide an accurate result although its results are predictable.

The forex cycle indicators give us the fluctuations of aggregate economic activity. Although they are not always precise yet it is recommended to use them with other technical indicators for probably the most accurate results.

Go to first indicators guide: Trend Indicators