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Successful forex traders know
how to use market indicators

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that reveal the best time to buy,
or sell a forex cross rate.

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Here are four
of the most popular.

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The first one is 
a trend-following tool,

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which suggests whether 
to enter a long, or short position.

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Essentially, trend-following tools
help traders recognize major trends,

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and then profit by trading
in those trends' directions.

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One method is the moving
average crossover.

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If the price of a stock climbs 
above its 20-day moving average,

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it could be 
a signal to buy.

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The second is a trend
confirmation tool.

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If it concurs with 
the trend-following tool,

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a bullish sign tells a trader
to take a long position

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in the currency 
pair in question.

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A bearish sign means find 
an opportunity to sell short.

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The moving average 
convergence divergence,

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or MAC-D is a popular 
trend-confirmation tool.

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The third indicator is 
an overbought, oversold tool.

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Traders must decide whether to jump in
as soon as a clear trend is established,

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or to wait until after a pullback
occurs, so they can minimize risk.

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The three-day relative strength index
can help traders make the decision.

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The RSI calculates the total sum of up
days and down days over a time period,

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providing a value that 
ranges from 0 to 100.

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An asset is deemed overbought
once its RSI level nears 70,

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and undervalued
if it nears 30.

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And the fourth indicator
is a profit-taking tool.

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An RSI that rises to 80 or more is an
indication that it's time to take profits.

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Other good indicators are 
Bollinger bands and a trailing stop.