Use a Forex Chart As Your Secret Weapon
Learning to use a forex chart will greatly enhance your ability to become a profitable forex online trader. As with stock exchange investing there are several popular chart types used to visually analyse trading data. Some of the forex chart types include bar charts, candlestick charts and point and figure charts.
The forex chart can be very useful when looking to analyze markets when using technical examination. The technical style of trading ignores basic factors and is only used with the price action of a market. This can be good to also remove the emotional effect trading has on your mental state.
With a forex chart you are able to see the movement of the market in a visual format. In addition to the standard chart you can add indicators or oscillators to help you make decisions about when to get in or out of your money trades.
In case you do not know what an indicator is, it is a series of data points used to help predict movements in currencies. Some of the more popular indicators used on forex charts are moving averages, groups and bollinger bands.
Bar Charts – are quite often used in security market technical examination. Bar charts are quite easy to construct making them quite popular. The charts are constructed by showing intra-day, daily, weekly or monthly movement as a vertical bar. Opening and closing prices are shown by horizontal marks to the left and right of the vertical bar respectively.
Candlestick Charts – were the secret weapon of the Japanese traders until Steven Nison of Merrill Lynch made the use of this chart popular in western markets. The candlestick chart is credited to Munehisa Homma, a Japanese rice trader in the early 18th century.
The candlestick is the graphic representation of the price bar: the open, high, low, and closing price of the period. The candlestick has become a widely used tool in online money trading.
When you use the candlestick in your forex chart there are many patterns that you can learn to clarify to help with your technical examination. There are 12 you really should learn. Some of them include morning star, evening star, shooting star.
When using forex charts you should be using live data feeds. This method the data you are seeing in your forex charts is based on actual money rates at the time you are viewing the chart.
To get your data and software for your forex charts you have free options and paid options. Quite often after selecting your forex broker you will receive some for of forex charting by their trading platform.
With the paid options you typically would pay for a data satisfy to construct your forex charts. This is typically a monthly subscription. You are quite often able to receive a free trial before committing to a subscription.
I currently use FXCM Trading stop and it comes with a built in forex chart. You can ask your broker what they recommend if you are wanting more progressive forex charting options.
If you are considering getting into the forex market and trading currencies I strongly recommend learning what you can about using a forex chart to help with your trading.
If you find this all too difficult you may instead wish to use a Forex signal service however this comes at a cost. It is always best to rely on your forex chart knowledge.