Forex market promotes the currencies from all over the world. Both minor and major currencies are available for trading. One can take advantage of the rise and fall of the currency prices. Millions of people are trading in this sophisticated financial market and making profits. But it’s not that much easy. You have to analyze the market only then you can earn profits either by selling or buying.
Fundamental and Technical analysis are the two important ways to analyze the market. Traders who do fundamental analysis identify the market trends by merely following market news and economic indicators. On the other hand, technical traders use charts and technical indicators for Forex Analysis. It helps the traders to know when to enter and exit the market.
Currency charts provide a visual demonstration of comparison between the two currencies. There are mainly three— Line Charts, Bar Charts and Candlestick Chart— that helps to make suitable Forex Trading Strategies. Your analytical preferences will determine the specific chart that you use. Trading platforms are more flexible that allows you to choose your trading style.
The global Forex suppliers software company Ultra Ltd has recommended some simple steps for traders to make the most of these Forex charts. Check it out:
Start with the Basics
You can get latest currency updates of the forex trading with these charts. You will a better understanding of the currency prices with the different charting tools, ask your forex broker about it. Most of the forex brokers offer the variety of their charting tools so cross-check it before you register a broker. This thing will help you to support your trades.
Currency Pair and Timeframe
Set a timeframe 1 hour, one day, one month, three months, six months, one year and so on and select your currency pair too. Once you finish it, you will view only those values that are relevant to you for the timeframe you have selected. You can observe the fluctuation in currency value over your selected timeframe.
Now, you can try to predict the future price movements. Fibonacci numbers, stochastic oscillators, moving averages, Bollinger bands or the Average Directional Index, are some indicators that you should consider while analyzing a chart. You have many options available for indicators; forex broker will also allow you to add your indicator. During your market/forex analysis, you should use minimum two forex indicators to make sure your decisions are right.
When you have gained enough knowledge, now you can interpret market movements based on the patterns of the chart. Because of this, you can predict future price movements and locate price trends. The most significant advantage is you can place right entry/exit points. It will ultimately stop loss levels and increase the possibilities of profits.