Forex Charts - Simple Tips for Bigger Fx Profits
This article is all about using technical analysis the RIGHT way - and using Forex charts to make big consistent profits.
Here we are going to look at some proven ways of analyzing forex charts and some great indicators.
You can then use them to generate trading signals, to zero in on the low risk high profit opportunities all traders want.
1. Trend Lines
You need to start and learn to draw basic trend lines to spot opportunities, it may sound old fashioned but it's the best way to spot trends.
2. Support and Resistance
The basis of most of the top trading systems.
Support and resistance is simply defined as levels where prices move to and then reverse.
In a rising market prices rise to resistance levels and fall while the exact opposite occurs in a bear market.
When prices break above or below significant support or resistance, a good trending move could be on the way - especially if the resistance or support is valid.
So how do you know if support or resistance is valid?
Look for lots tests - and look for how many different time periods tests have occurred in - by looking back at your Forex charts and also the distance in time between them.
3. Breakouts
If prices break through important support or resistance, then the odds are that the supply and demand position is changing and a new trend will develop.
Trading with breakouts, and trading in the direction of the break is profitable but most traders can't do it.
Why?
Because most traders like to buy low and sell high.
They wait for a pullback to buy at a better price - and it doesn't come and the move is missed.
Most major currency trends start from new market highs - NOT market lows.
To catch the trend you need to go with the break and forget about buying low, however not every breakout will work but how do you spot the ones that do?
You need to watch price changes in terms of momentum and volatility.
Volatility Changes
Volatility is a term used to describe the magnitude, or size, of day-to-day price fluctuations - regardless of their direction.
Generally, changes in volatility give clues to changes in price. A breakout that is accompanied by high volatility, is the ideal set up.
An indicator you should look at to determine volatility is the Bollinger band.
Bollinger bands can also help you identify support, resistance and targets for the move and are an essential indicator.
Price Momentum
Momentum is a general term used to describe the speed at which prices move over given time-periods. Momentum indicators can therefore determine the strength or weakness of a trend by looking at shifts in price momentum.
If price momentum increases on a break, then the odds are that the break will continue and a new trend will develop.
There are two good indicators for looking at changes in momentum:
The Stochastic and Relative Strength Index (RSI).
There is not enough room here to go into how they work simply see our other articles or look them up on the net, both give a highly visual picture of changes in price momentum and are easy to use.
Finally
If you can draw trend lines, spot breakouts and use volatility and momentum indicators that we have outlined above you could soon be on your way to making big consistent profits with your forex charts.
Related Tags: trading, currency trading, forex trading, forex, online trading, trading platforms
Grab 5 FREE Trader PDF's Much More
Get the support you need to trade like a
pro with our user-friendly multi-lingual online trading platforms
up to date financial news, real-time market prices, tight pip spreads,
built-in risk management system, and 24-hour professional support.
Grab your FREE PDF's NOW:
http://www.bestonlineforexbroker.com
Recent articles in this category:
- Sbi Best Sip Plans 2010
SBI Mutual funds have introduced many mutual schemes. Each scheme has different limitations. SBI SIP - Icici Sip Plans 2010 - Best Sip Plans
ICICI Prudential offers many schemes. These fund schemes have SIP. What is SIP? SIP's expansion is S - Determining Where To Invest Money
There are several kinds of investments, also you will find numerous factors to find out where to inv - Retirement Plans A Necessity Of Life
A person works whole life to give a decent upbringing to his children and families. But while improv - Stock Market Timing Signals
Follow the PlanThis would seem a statement of common sense, but the fact of stock market timing sign - A Selection Of Financial And Investment Strategy Guidelines For Turning A Profit
Yet, we don't often have the money to leave work right at this moment. We need a constant salary to - Find Out The Profitable Way To Invest In Small Cap Stocks
Everyone wants to find a penny stocks list or other investment strategies that can turn your literal - Portfolio #4 - Watergate
IntroductionThe problem is not that the world is running out of water. No, the problem is that drink - Dulton Group: Information Content Of Dividends
Dulton Group helps you to analyze the information content of dividends, an important factor affectin - Coping With Fear In A Markets
The real fact is that all traders, investors as well as stock market investors, who feel afraid, occ
Most viewed articles in this category:
- Investor Stress: A New Approach
George Muzea is both an investor and a stock market advisor. In any given month, he will be paid $10 - Real Estate Investment Financing
1. Location: Your real estate investment's location is arguably the most important component of your - Canadian Oil Sands - Who Are the Major Players
The Canadian oil sands represent one of the most lucrative investment opportunities to oil and gas i - Why Bulk Preconstruction?
Bulk preconstruction is the latest trend in secure, high profit real estate investing. By buying wit - Investing - It Is Not As Scary As You Think
Many people want to have more money - OK everyone does. However, most people don't know how to go a - How Do I Know Which Programs Are Scams?
Although it is virtually impossible to tell if a HYIP is a scam until the moment when they stop payi - Currency Trading Success - 6 Tips to Increase your Profits
If you want to increase your profit potential and achieve currency trading success then the simple t - The Business Cycle
Investors who want to beat the market should be followers of the business cycle. The business cycle - Pros and Cons of Real Estate
Like any other profession, there are good and bad things about what are available. Each of the thin - The Fixer Upper
Real estate investing has become almost a national pastime. Millions are made every year on the buyi