Forex trading is one of the most complicated trading options in the world. There are various forex tools available in the market that simplifies forex market to some extent. Two of the widely used tools are the Fibonacci retracements and Moving Average Convergence Divergence.

• First are the Fibonacci retracements: This trading tool is based on the harmonic sequence of numbers. This tool can be used to find the support and resistance levels in the market. If you have even a slight experience of dealing in forex market, you would know that timing is of paramount importance. There is a peculiar time which is most suitable to enter and exit the forex market. If you miss that time, you are going to have a hard time in dealing with the currency trading. This is where it is important to know the support and resistance levels. Support levels give the information about the levels at which a particular currency pair is supported. The market is likely to reach those levels if all the calculations fall in their place. The resistance level is that level that gives the idea about the levels at which there are traders likely to invest. Once the currency pair reaches the resistance level, it is likely to stay at those levels. There are various trading softwares that have the provision of Fibonacci retracements. There is also an option to overlay these indicators on to a trading chart to make it easier for an average trader to comprehend.
• Moving Average Convergence Divergence: Commonly referred as MACD, it is a complicated trading tool and it involves a lot of calculations. But, most of the trading softwares calculate this term themselves and give the final result to the user.  This tool shows two lines as its result. It basically calculates the moving averages of the market rates. It gives an idea about the market trend and the direction in which it is heading. One of the two lines gives the idea about the convergence factor of the market and the second one gives the idea about the divergence factor of the market. Theoretically, when these two lines cross each other it is a marketing signal. It suggests that the market is likely to change paths and there might be a possibility of reversal of trends. If you were to go by Moving Average Convergence Divergence forex tool, this is the best time to exit the market and square off the open positions if any.

None of the above mentioned 2 tools are sufficient of their own. Fibs can be used to evaluate the best time to enter the market and MACD can be used to exit the forex market.