The Forex market is the most liquid and deepest.
Over $5 trillion is traded every day, according to the Bank of International Settlement (BIS).
Traders across the world, therefore, seek to exploit market inefficiencies every day and profit.
A natural question in all their efforts, therefore, is: Which is the best indicator to trade Forex?
There are fundamental and technical indicators. Both are useful.
Then there is price action which merges technical and fundamental activities of a given currency or asset at any point in time.
Most times, Forex markets are efficient. As a result, it is tough to beat the market consistently.
Analysts believe pure price action is the best indicator. They sum up all activities at any given point of time in an efficient market.
Therefore, ambitious traders should strive to make sense of price action while limiting their trading to a few reliable and possibly real-time indicators like trading volumes.
Here's why: Most technical indicators may be simple to follow but present uncertainties as they are lagging—therefore not accurate—since they follow price action.
Accordingly, while it may be hard, technical indicators shouldn't be the primary trading tool. Instead, the best' trading indicator' is price action. Traders should strive to sharpen their price action skills to a skills stay ahead of the game.
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