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Category: Articles » Finance » Currency Trading » Article » Article Code

Learn Forex Trading through chart analysis

Using charts effectively Let's us have 300 as the default number of periods on the charts. Do have a setting for the chart as below: · Hourly chart -12 days of data. · 15 minute chart -3 days of data. · 5-minute chart -more than 1 day of data. Domain aspects Look carefully to have an overall concept about the chart. Do notice about the significant support and resistance levels within 2% of the market opening rate. Read the 15 minute chart carefully and noting the following aspects: · Prevailing trend · Current price in ... read more

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Using charts effectively
 
Let's us have 300 as the default number of periods on the charts. Do have a 
 
setting for the chart as below: 
 
·	Hourly chart -12 days of data. 
 
·	15 minute chart -3 days of data. 
 
·	5-minute chart -more than 1 day of data.

Domain aspects
 
Look carefully to have an overall concept about the chart. Do 
 
notice about the significant support and resistance levels within 
 
2% of the market opening rate. 
 
Read the 15 minute chart carefully and noting the following 
 
aspects:
 
·	Prevailing trend 
 
·	Current price in relation to the 60 period simple moving 
 
averages. 
 
·	High and low since GMT 00:00 
 
·	Tops and bottoms during full 3 day time period.

How to well use the information
 
1. Determine the overall concept (for intraday trading).
 
Read through every uptrend or downtrend points hourly to have 
 
an overall concept. If those turning points are inconsistent, it 
 
means that you're in a trading range. Let's have a downtrend 
 
example.

2. Make sure the 15 minute chart is in a downtrend point with the 
 
pattern of the chart's flowing:
 
It is confirm that the market is in a downtrend when the 15 minute 
 
chart's current price is below 60 period moving averages and the 
 
moving line is sloping down.
 
There are two trends, prevailing trend that known as major trend 
 
and a minor trend. The minor trend is distinct with the major trend. 
 
Minor trend only goes for a short time and can be spotted clearly 
 
on 5 minute chart.

3. Determine the major trend and minor trend from the 5 minute 
 
chart:
 
-For 5 minute chart, which the current price is below 60 period and 
 
the moving line is sloping downward, is a major trend.
 
-For 5 minute chart, which the current price is above 60 period and 
 
the moving line is sloping upward, is a minor trend.

How to well trade with those information
 
1) For example, down prevailing trend and a minor uptrend. The 
 
strategy would be--- sell when the 5 minute chart's current price is 
 
below the 60 period moving average and moving line is sloping 
 
downward. It is because the prevailing trend is reasserting itself 
 
and it is likely to be down for the next move. Besides, look for 
 
other clues. Enter the market when the minor trend had slowed 
 
down and the chart's flowing is likely very close to the 5 minute 
 
moving average line.

2) Let's have a down prevailing trend and a confirm 5 minute 
 
downtrend chart. Strategy would be --- Enter the market after the 
 
current price moving line goes minor uptrend and then reverse. It 
 
is because the move is not yet 'stable'. Withdraw when there is a 
 
reaction if you trade with tight stops. If a market is trades through 
 
today's low or in a downtrend for the past three days, the market 
 
is likely to be downtrend and there will have a reversal soon.

3) Another example, an assuming prevailing trend down, a 
 
downtrend 5 minute chart, and just above days' lows. The strategy 
 
would be ---Trade with a tight stop when the current price is below 
 
the days' lows. The chance and the risk are limited depending on 
 
the technical condition that the traders have. In this strategy, the 
 
idea behind this is those traders are not waiting for a long break of 
 
today's or yesterday's lows to enter the market as they are think 
 
they might not have a clearly break.

4) The safest place to enter a market is -- buy after a sustained 
 
significant decline and likely to change to an uptrend. Look also for 
 
a long decline level. By the level third or forth higher bottom, it is 
 
clear that an up-move is coming.

5) The reverse is true in major uptrend.

For more Reading, visit <a 
br /
href="http://www.learnforexsecret.com">Learn Forex Trading in 
 
Technical Course</a>

Author Bio:

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