Using Forex Charting Software

Forex charting software is a graphical method of taking live FX market data and putting it into a form that easy to see and interpret. Traders typically view charts in various time frames. There's the monthly, weekly, daily, hourly, 30-minute, 15-minute, 5-minute, 1-minute charts. Depending on what trading method you apply, you'll use a combination of two to four of these charts.

The best way to use these charts is to find the current trend of a currency pair. The way to do this is a top down approach. You start with the longer time frame charts like the weekly and daily and see if there is an obvious trend direction is happening. Then, you move to the shorter time frame charts to execute your trades in the direction of the trend.

You can add trend indicators on your charts like moving averages and MACD. These help you to be totally sure you have the trend direction right. I found that the best trends to trade are the ones that are obvious and don't need an indicator to tell you this. You simply see that the currency pair is trending up or it's trending down. The more obvious the trend the better the trade will be.

In addition to finding the trend, charts are used to pin point trade entries. This is a skill that is not easy to develop. When I used to do manual trading before I bought a couple of automatic trading systems, I had a few indicators that helped me. I would draw trend lines, add MACD indicator and the RSI oscillator to my 15-minute charts. When everything lined up, I'd take a trade.

Using the right tools like Forex charting software is extremely important. Be sure to test out whatever system you end up using before you put your complete faith in it. Reliability of software is always something to be aware of when selecting a charting package. There are lots of free ones out there but I strongly suggest you avoid these unless it's in a demo account from a broker.

More articles:
How to Calculate Profits. Compare Forex Brokers. Analyzing Time Frames. What is required to trade Forex successfully? Choosing the Right Forex Trading Strategy. The Advantage of Using A Forex Signals. How Stop-Losses Work. Day Trading Strategies For Beginners. Using Forex Trading Signals. Finding a Good Forex Broker. Forex Trading Basics. Using a Managed Forex Account. Forex Market Advantages. Using Forex Charting Software. Using Forex Indicators. Using Forex Trading Alerts. Forex Forecasting Strategies. How to Read Forex Charts. Forex Swing Trading Methods. Learn Forex in Six Steps. Automated Forex Trading.