How to use forex charts

You cannot trade on forex without using a chart. There are several types of forex chart available at each forex broker and is your personal choice which one you like to use

All types of forex charts have their advantages and disadvantages but one thing is for sure: the correct use of forex charts is absolutely necessary in order to trade successfully. That is why you should keep in mind some tips that will help you use the charts with maximum profitability.

First of all, when you want to use a chart for the technical analysis, you should decide what time frame is the best for this particular situation. There are some standard time frames available in most trading platforms such as one minute, 5 minutes, 10, minutes, 15 minutes, 30 minutes, one hour, two hours, four hours, daily, weekly, monthly and yearly. Some trading platforms allow you to choose your own custom time.

The time frame must be close to the trading period for example if you intend to day trade you should look at a daily chart. Is good to know that the smaller the time frame is the chart becomes deceiving. Once you identified a trend you should verify it on a larger time frame. For example if you want to day trade and your technical analysis says the USD/EUR is on an uptrend you better take a look if the uptrend also checks out on the weekly chart.

Most commonly used indicators are Multiple Moving Averages, Moving Average Convergence Divergence Indicator, Bollinger Bands Indicator, Fibonacci Indicator and the Stochastic Indicator. Is crucial to know all these indicators very well so you can give them the right interpretation in your technical analysis.

If you are a beginner in forex trading you should create a demo account and trade on virtual money until your technical analysis proves to be right. You can find demo accounts at all major brokers including Etoro, Ava FX and Forex Yard.