Learning how to use currency charts is the single best way to make money in the least amount of time when trading the forex market.
When you use charts, there is no need to watch the finance news, study the economy or try and keep up with the business developments of countries around the world.
All you need to do is follow prices and trade trends as indicated on the chart. Let’s take a look at how forex charting works.
Currency charts are only used in forex technical analysis. When you are using this system, you are not interested in knowing the reason behind the price movement. That is a factor that only comes up in fundamental analysis.
With technical analysis and charts, your only focus is on how the prices are moving not why they are moving. This is called a trend and will form the basis of your forex trading. You study the trends, see where prices rise for longer periods on any chart and you make your trade decisions based on these trends.
When you are using charts, it is advisable to stay focused on long term trading. If you study the market trends, you will see that it is the long term trends that tend to make the biggest gains as compared to day trading. When you engage in short term trading, you tend to put in much more effort for similar or less profit. With long term trading, the effort is less and the profits are higher.
I cannot emphasize enough the importance of keeping currency charts simple. I have seen people who want to put every bit of information or statistic on to their chart. The problem is, forex trading charts that are too cluttered are also too complex. There are too many parameters and other elements to keep track of.
Simple strategies on the other hand are the most effective. Your chart will be clutter-free and you will be able to track all the information you want at one glace. Restrict your strategy to just high odds chart patterns and use only a few select confirming momentum indicators. These two factors will help your market timing.
Sometimes, money movements can be unpredictable and you may find yourself in a losing position.
There is a lot of debate amongst traders about whether it is better to hang on to a losing position in the hope that it will improve or whether it is better to cut your losses and run.
I definitely ascribe to the latter opinion. I would never advise
anybody to let their losses run. In my opinion, based on experience, the
sooner you get out of your losing trade, the sooner you can invest that
money in another trade and recover your losses and start making
Looking for some help with understanding how to use charts to maximize your profits? Get in touch with me and I’ll give you a few pointers.