Reading forex charts is a basic skill in forex trading and it is very necessary. The technical trader needs to rely on real time charts to understand the forex market and set a plan for the trades he makes according to the information he recieves. Comprehending forex charts comes with a lot of learning and practice. It is a skill that every trader in the forex market should master.
Forex charts are important because visual chart patterns shows the technical trader to look only at price action without trying to analyze the reason behind the price movement. Fundamentals show up quickly in price movements so by watching the charts a trader can watch not only the latest news, but also see how other traders are reacting to each piece of news.
When using forex charts, make sure to check the time frames of a chart. It can be 4 hour, 30 minute, or even 1 minute charts. At times you need to use several time frames in order to establish a overall trend. These are useful indicators called MACD, support and resistance lines, momentum etc. A long-term chart shows the overall direction of movementin a price, while a short-term chart is useful to spot a place to entry.
There are no scientific laws that guide forex chart indicators. Predicting the market does not work. When you catch yourself guessing stop trading immediately, you will lose money. Learn the momentum oscillators, since these are the basic instruments for forex trading success. Without the knowledge of price momentum which is found in the forex charts, you may not have alot of success.
Kiss, Keep it simple. Using every indicator available may not be the right way to go. Simple forex strategies based on support, resistance and few momentum indicators are all you need to make profits. Staying disciplined and emotionless, using forex charts will lead you to the success you look for and make a lot of money.
Check the times on your forex charts. The times correspond to the opening or closing of the candle. Forex charts are the primary tool for technical analysis, analyzing the price patterns of a currency, the history of it and forecast it’s potential move in the near future. Invest the time in learning and understanding the basics. With forex charts you can become that successful trader.