How to Choose the Right Forex Indicator Period
When we focus on one forex indicator in one trade, there are questions that often arise about how many indicator periods should be used in each pair. Two questions that often appear in the forex indicator period used by default settings or forex traders must use the “tweak” settings?
When the number of periods of the forex indicator set is enlarged from the default price, the forex indicator will become less sensitive to price movements. Just as it is used in a large amount of time to calculate (average) price movements. As a result, we often see prices “late to move down or up”.
Conversely, when the number of periods decreases from the default price, the forex indicator will become more sensitive to price movements. That’s because the forex indicator uses fewer period of time. In this case we will see the price will increasingly “quickly move up or down”.
How to quickly review the RSI indicator.
The RSI forex indicator will give a buy signal when it is below the level 30 and then the forex indicator moves and closes above 30. The sell signal occurs from the RSI indicator when the price is above 70 and then moves and closes below the 70 level.
The first RSI indicator in the chart below is standard using the standard period 14.
In the second version of the period our forex indicator has shortened the number of periods to 9.
If we compare the signal to the price movement on the chart, we can see that some valid signals will produce pips.
Set RSI indicator at period 25.
We can see the smoothing effect that increases the number of periods it has. When the signal does not appear, however, it will have a greater degree of reliability behind periods 9 or 14.
A forex trader can set whatever period they find and best to become their respective trading style and forex strategy.
For long-term trading, the number of periods may increase
increase. A little trading signal will keep the signal generated
have a greater level of reliability. (Same as using short term versus long term charts).