Forex charts are based on the price action of the foreign exchange market. Charts are an important tool in forex trading. There are many types of charts, each of which will help visually analyze the conditions of the foreign exchange market, assess and create better forecasts and identify patterns and behavior of the foreign exchange market. Below are certain things to analyses in a chart to rake high profits.
Forex Chart Analysis Tips
Type of trader: There are different ways to make money by trading in Forex. You must first decide how you wish to trade. You will be day trader, balance trader or opt for a long-term investment approach.
Selection of the graph: the selection of the period of the graph is as follows. If you are going to trade in one day, focus on the 5 minute, 15 minute and hourly chart. For swing operations, you focus on the 15-minute, hourly and daily charts. For long-term investments, you spend most of your time monitoring the daily and weekly charts.
Chart analysis order: for each trading approach from point number 1, it is necessary to examine its charts from the longest periods until the close. For example, the day trader will first look at the hourly chart, then 15 minutes then 5 minutes. The purpose of analyzing the chart in this way is to give you an idea of the trend of the currency pair before you start trading.
Trade entries: Once the trend is established, you will use the closing period to carry out your technical analysis. Technical parameters, such as the use of trend lines and the MACD indicator, tell you when to enter or exit a trade.