Forex charts provide vital clues in Forex trading. Both seasoned and amateur professionals have used these charts to determine entry and exit points and rake in the profits. If you too wish to make a neat profit then here are five tips to help you get the most out of your Forex charts.
1) Look for the important aspects: You need to keep monitoring the charts every hour. While this may seem like a laborious task, the efforts do pay off. If you notice any resistance or support levels within a 2% range from the opening rate of the day, you should note it down.
Make sure to observe the chart of 15 minutes while especially considering the current price vis-a-vis the simple average of 60 period, the lowest and highest prices since 00:00 GMT, prevailing trends at the moment and the bottoms and tops during time period of 3 days. If studying charts is new to you, you should consider opting for a Forex training program. Such Forex training courses teach you the intricacies of studying charts as well as things to observe in them to achieve a profit.
2) Correctly using the information is vital: Once you have perused the charts and gathered the information listed above, it is important to use them appropriately. About intraday Forex trading always, check the chart on an hourly basis. This provides a bigger picture of trends.
If the bigger picture indicates a downtrend, ensure the 15-minute type of chart also indicates the same. If there are both minor and major trends, the minor one will be a reversal of the major trend and will last only a few minutes. You can easily spot these on the charts of 5-minute type. This is another technique taught in all the Forex training courses.
3) Knowing how to trade this information: By studying the charts in the above-mentioned manner, you can note the trend of the currency pairing you are trading in. In addition, through this information, you will also be able to gauge if the Forex trading is happening in the same direction as the major or prevailing trend or if there is a minor trend being experienced by your trading.
4) Understanding common Forex trading situations: There could be a situation where the major trend of Forex trading is towards a downside whereas our trading is on an up-trend or minor trend. The best tactic would be to sell as soon as the price is below the moving average in the 60 period.
Another situation could be when the major trend is downside and the minor trend is also downside. You will need to wait for a small up-trend to happen and then reverse as soon as it enters the market. Another tactic to follow in a similar situation would be to buy before the day hits the lowest value and have a tight stop order. Since risk is lesser conditions are favoring you.
5) Miscellaneous ideas to leverage: There are many other techniques, which are taught in-depth by Forex training programs. For example, an entry level start is well achieved by selling below the old bottom values and buying above the old top values. If the higher bottom value prevails it means a strong currency value.
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