How to Analyze Forex Charts?

Forex trading is a complex form of trading in the leading financial market. The market is known as the foreign exchange market. Technical and fundamental indicators are used to study the forex charts provided on any of the platforms.

This market is said to be the largest financial market due to the large average daily turnover of the market. The turnover is around 6.6 trillion dollars. There are various ways to study the charts of the forex market.

Proper analysis of the market is required to understand the market in a better way and to make a proper decision of the market. Traders can make a higher profit from the market by making proper analysis.

Types of Market Analysis

There are three major types of market analysis that are:

Fundamental Analysis

To determine upcoming changes in the forex market fundamental analysis is one of the best analyses. It involves studying the factors such as interest rates, GDP, unemployment rate, and many more.

Reading the fundamental factors can give traders a strong reason to invest in the market. They can earn higher returns from the market if they study fundamental factors in the right way. Understand the relationship of two countries between each other.

Technical Analysis

Technical analysis means studying the price charts using various indicators provided by the trading platform. These can give a strong reason to make a buy and sell decision regarding your favourite currency pair.

Read to the historic price movements of the currency pairs you are looking to make an investment in. Automated trading can be used while trading with technical indicators. Traders can earn good profits using technical indicators.

Weekend Analysis

The weekend analysis gives traders a longer time frame to study. Traders can see the price movement for the whole week in just a glance. This is required to make an analysis for the upcoming trading week.

Traders can make a mindset of what they need to do in the upcoming week. Because without a trading plan the chances of getting a failure are higher. It is a good time to study the market as the trading activities are closed on the weekends.

Analysing Forex Charts

The forex market can be analysed using these ways and traders can make better decisions using these ways. The ways to analyse the market are as follows:

Study Indexes

Traders need to chart the important indexes from the various markets and need to keep an eye on them. Studying the indexes help in determining the relationship between markets and whether the price is going to move up or down.

There are several types of indexes in the market and traders can take advantage of these. The market which is highly profitable can be used by the traders for trading.

Read the Drivers

To become a successful trader, you need to understand the relationship between the markets. Also, find the reason behind that relationship between the markets. Traders need to keep in mind that those relationships can change with passing time.

Time Your Trades

A successful trader knows before investing in the market for how long he needs to stay invested. Determine the time frame along with the timing when to enter and exit the market. After determining this, the profits can be maximised for each trader.

Find the correct timing using the support and the resistance lines, Fibonacci level, and many other factors. A better opportunity can be gained by studying the factors of the market.

Determine Price Movement

Study the price movement and the historic graph of the price. The historic graph can help you determine the future possibilities in the price movement. It is a strong factor to analyse the forex charts.

Choose Reliable Online Forex Broker

Traders should trade with reliable and reputed brokers that are offering good trading features. The trading leverage is one of the most important features offered by an online forex broker. A few of the leading online brokers are:

Global TradeATF

ETFinance

Capixal

These brokers are regulated, offering a wide range of educational resources for traders. Also, a wide range of analytical tools with high trading leverage for professional traders. Traders can start trading with them and select a demo account in the beginning.

The Bottom Line

Currency pairs are traded in forex trading and traders need to understand the marker for making proper trading decisions. The three most common types of market analysis are discussed to assist traders along with the ways to study the forex charts. Identify the opportunities by using the ways and make money while trading forex in the market.

One of the most important things is the broker with which you are trading. Traders should opt for a reliable broker for trading. Some of the options are mentioned in the article, traders can compare different brokers to find the best one.