Forex Forecast Using Charts

It has all been said & proven that FOREX forecast using charts are the best tools ever created in assisting traders to determine the market directions. A clear & notable market direction is all that matters to a trader, especially to those who are practicing scalping. This term refers to those who are trading along the market wave, be it up or down. The move focuses on cutting a tiny part of the wave from point A to point B to gain profits. The move is being done over & over again within one trading day to optimize the returns as much as a trader can make. Therefore, determining the right directions of the market are the most crucial skill that a trader must has.

Forecasting the directions of the FOREX market using charts can be learned. It can be a little tricky here and there, but definitely, it can be learned. It depends on whether you are an investor or a trader. Investors normally keep their positions (buy or sell) in the market more than one trading day, say one week. A trader, on the other hand, will generally complete their trades within the trading period in the day. Traders may enter the market in the morning or in the middle of the trading session (based on the charts that they refer to) but they definitely will clear up the positions (gains or losses) by the end of the trading day. Both types of players will have their own justification on their strategies but both types do have one thing in common; their main objective of entering the market is to make money.

Generally, there are two types of market indicators that are widely used by market players (investors and traders); fundamental (news, reports etc.) & technical (charts).

Fundamental indicators are referring to intangible factors that may have the influence over the market’s movement. Take news for example, in the FORX market, any breaking news of a country’s economic or political performance may have direct impact on the direction of the currency of the country. News on political instability of a country may lead the value currency of the country to depreciate over the benchmark(US Dollars as the main reference of world’s currency for its stability) as foreign investors may pull out their investments from the country and thus, giving a negative impact on the country’s economic condition. It is affecting the currency by (temporarily) swaying away the investors from keeping the affected country’s currency in their investments portfolios and hence, selling pressures will then lead the value of the currency further down.

Please bear in mind, however, using the news or other fundamental factors as sole indicator for trading in the FOREX market is vulnerable for the investment. This is due to the fact that usually, the news has already been discounted by the FOREX market movements. In other words, when the news is being broadcasted, the market has already reacted to the news & hence, for those who are relying on the news to forecast the market movements will be left out the moment they decide to enter the market. Moreover, the news that is being broadcasted is not a first hand or fresh news to the traders. The only effect that breaking news could give to a market is a panic moves (selling or buying) by traders to close any positions that they hold in the market. Sadly, at some point though, the last group of FOREX traders who missed the boat to follow the trend may then exit the market at a very inappropriate time & thus, loss their positions to the market. The odds of losing in the FOREX market are very high if a trader only uses fundamental indicators to forecast the market.
On the other side of the coin, technical or charts indicators have been widely used in various types of markets, including the FOREX market. It is sound and practical for traders to use the technical indicators as in using charts. Various charts are available for reference and among the reliable types are the Relative Strength Index (RSI), the oscillators (Stochastic, Moving Averages), the Candlesticks & many others.

Nowadays, in the advancement of the technology, trading has become more & more sophisticated. Instaead of placing ordrs on manual basis after studying the trend and determining the entry –exit points on the charts, a lot of traders(sad to say, especially beginners) prefer to find the easy way out by using pre-programmed software or bots to do the trading for them. The software or bots are programmed to place entry and exit points on the market so that less or no monitoring is needed by the users. It is not wrong though as the objective of making money from the market is still there, but, these software do not come cheap as there is a big price tag to pay to use up the tools. Ths is not practical for the beginners (unless you have the money) as this is considered as extra risks in your trading.

How this is counted as an extra risk?

Let us do the Math, to start trading, there is an account that must be set up at any broker or agencies that you want to join. There will be a minmum amount that must be deposited in order to enable you to trade. Be it a $200 or say $500 mnimum, it is still counts as your capital, your money & to get the trading software, you have to fork out another, say $200. Well it has total up to nearly $700 to start. Plus, what is the assurance that the software will definitely make money for you? What if it’s not up to the hype? Is there any money back guarantee policy? Will you be able to access to the customer service should you need help? Or worst still, is there any assurance that the money-back-guarantee policy is honored should you decide to get your money back?

Don’t get me wrong. I am not against any party selling the software but those are foreseen risk which is avoidable (at the very least, for the beginners).
Some of the software are good but some don’t even deserve a review, what more to be used?

The question is how to determne, how to differentiate the good from the bad?

That is the reason that this blog is set up; to be a platform for the beginners to consider very carefully before even looking at the FOREX market. Prepare yourselves. Learn the appropriate knowledge especially the basics; what is the FOREX market? How does it work? What are the risks? How to determine the trend? How to place appropriate positions? What the do’s & don’ts?

The reason is simple, if you are using the bots (it could be any bots out there) and something go wrong that made you lost your money to the market, so you decided to do it on your own as you have lost the trust to any other bots but still have the confident that you can make something out of the market. Since you have seen how the bots place your positions on the charts before, will you be able to do it without the appropriate knowledge?
I doubt it.

There are many ways to start. Read and ask the experts or the people who actually in the market are good ways for start. There are a lot of books or even articles on FOREX market, FOREX trading, FOREX forecast using charts, Technical Chrats for Beginners, Make Money from Forex using charts, so on and so forth. Read them and get the understanding on how the market really works, how you can make money from the FORX market. Then get a long and make friends with the experts, with existing tradrs or former traders. There are a lot of forums available for you to join in. Check and join forums that meet your needs. Do it step by step. Trust yourselves, it is worth the efforts.

Don’t worry of mssing out the opportunities to trade in the market in its best movements, the market has existed for a long time, it is moving 24-7 & it’s going to be there for a very long time until there is no currency is traded in the world (you believe me on this?), you can definitely enter the market the soonest you have the knowledge to ride on the waves, ups and downs.

The FOREX market is like a war zone, plan your strategies with the appropriate knowledge (forecast the market possible moves using charts), prepare your armor & weapons (lots of weapons), that is understanding the risks by anticipating them such as placing of stop loss orders and make the moves bit by bit, piece by piece (one trade a day, three times a week is reasonable enough for a start. Rome was not built in a day). Always have a backup trading plan should the markt moves against your direction (again, anticipate the risk, use stop loss). Stay out for a while if necessary, re-plan (reviews on the charts and another forecast) and make another set of moves (buy or sell again together with stop loss). Luck may play some tiny part in your forecasts and trading but never solely rely on your luck all the times as you may run out of them sometimes.

So, start somewhere with forecast using charts. Give a look at Candlestick charting if you prefer. It’s interesting to learn them, especially the unique names they have (doji?). Learn the art and master the war. Happy learning FOREX forecast using charts!

Take charge.

Taichi

Forex Forecast Using Charts