Let's dive right in with a quick definition of what a Forex chart indicator is. An indicator is a derivative of price, time, and/or volume. One of the most basic examples of an indicator is the simple moving average. A moving average can be abbreviated as MA. One MA that is commonly used is the 200 day MA. The calculation of this indicator is very simple. We would take the closing prices of the last 200 days of the currency pair we are interested in and divide it by 200 to come up with the average.
Indicators are plotted on a Forex chart along with the prices. An "indicator" gets its name because it is designed to "indicate" or point out a particular area of Forex market interest. In our moving average example when prices move above the moving average that "indicates" an up trend. When...