Making Profits with Buy and Sell Signals

Written by: Dave Green • Sunday, September 9, 2012 • 2 min read

Last updated: Sunday, September 9, 2012

A buy sell signal is a real time indication to buy or sell a certain currency (or currency pair). Forex signals are usually created by technical indicators. There are many technical indicators to help traders with their technical analysis of the charts (26 indicators overall!), but the most popular ones for traders to indicate on buy sell signals are the Relative Strength Index (RSI), Stochastics, Parabolic SAR, and the Moving Averages.
Learning to work well with two or three technical indicators can lead to much higher earnings, and a higher winning percentage on your trading positions.

Personally, I find the RSI and Moving Averages indicators as the best buy and sell signals to work with when analyzing the charts. The decision to buy or sell currency should light up a few candles after the buy sell signal appears.

Parabolic SAR is also a fantastic indicator, especially for beginners, as it is really easy to use. You simply follow the dots which are located above or beneath the candles on the chart. If the dots are below the chart, we have buy signals, and if they are located above the chart we have a sell signal.
See how RSI indicator looks on the charts:
how to use parabolic sar

The RSI, my favorite buy sell technical indicator, is able to determine oversold and overbought market conditions, and by that, allows you to predict which direction the currency goes next.
how to read rsi indicator
If the RSI indicator raise above '70 level, the market is overbought- a sell signal. If RSI drops below '30 level, market is oversold- most chances are for a reversal to buying conditions (a buy signal).

See how RSI indicator looks on the charts: