Technical charts play a key role in understanding the Foreign exchange market. To understand the market movements, to study the shifting psychology of the market, to gauge the strength of the bulls and bears, it is important you know how to read the charts. In the next few moments, I am gonna try and convince you of it’s benefits.
Forex Charts – The genesis of Technical analysis
The Forex market sometimes is a mind game. The action here is pretty fast and you need to be alert to be a part of it and to benefit. The most important part is being able to spot a trend and ride with it. Now, how do you recognize a market trend without handy info? This is where the charts come into play. The art of reading the charts is called Technical Analysis. The charts help you unravel the mystery of where the market is going. You can get minute by the minute picture or if you are a long term trader, the long term picture using a daily or weekly time frame chart. Technical analysis also helps you study the historical pattern of a currency enabling you to make some key predictions in the market movements. This ability is what separates the successful traders from the mediocre.
Characteristics of Technical Analysis
Usually, the charts are available from your broker you sign up with. The most popular free forex trading system software packages are MetaTrader and Dealbook 360. Each has it’s own restrictions like time bound usage, but can always be renewed.
The charts are offer real time data empowering you to watch the market movements live. You will updated tick by tick where the market is headed and can perform real time technical analysis. You can watch a currency in multiple time frames to understand both the micro and macro picture of a particular currency.
In addition to the bare charts, the software provides you with analytical tools like Indicators.
Some of the indicators are Relative Strength Index, Moving Averages, Convergence and Divergence, etc. They make the job of analyzing the market bit easier through pre-calculated mathematical formulas that are represented in visual format.
Technical Analysis literally decides your career in the market. If you are good at it, you will be undoubtedly successful. If you fail to read the signals the charts project, the future may not be bright for you here. Lastly, Technical Analysis removes the doubt and uncertainty from trading by providing precise information about the market movements.