Forex Trading Charts

Charts forex trading is a tool used by forex traders. The first thing you'll notice when you fire up your trading platform will be the numbers and graphs blinking. These graphics are the bread and butter of forex trading. They will show you everything you need to know and with a little practice, you will be able to read and trade on them. At first you may feel a bit overwhelmed with all the options and settings, but provided few weeks and you will read the 'wax' and the trend line, as you have done nothing else all your life. This article will look at some of the most common signals used in forex trading charts.

Simple Moving Average
Simple moving average is often the first signal that forex traders learn. This is a line running trough your graph to show you the average run for any period of time. The moving average shows the average price over a period of time. This differs from the simple average in the simple average will only return a single number such as 30 sets out, but the moving average will show an average 30 of 30 sets of prices. It shows the general trend over time and can be used to determine whether you should buy or sell. If the price of a currency is above the moving average, then might be a good time to sell and on the other hand, if the price is below the moving average, then you should consider buying.

Bollinger Bands
The signal is next on our list of Bollinger Bands. This technical indicator shows two lines that show you both the liquidity and volatility in the market. They are similar to the level of support and resistance lines. If two lines are set well apart, it means that there are a lot of action in the market, buying and selling. If they are close, then it means that the market is enough. After a quiet period, it often happens that the market is moving strongly in one direction. Therefore you can use Bollinger Bands in combination with other signals to look for these opportunities.

Stochastics
Stochastics indicate if the market is too expensive or underpriced by using statistical measures. This involves using a simple moving average or exponential to test this assumption. Stochastics either buy / sell signals.

Parabolic Stop And Reversal
Also known as the SAR, this is an indicator that can be used to determine whether the trend has been top or bottomed out. This indicator can be used with other indicators to make sure you enter the market at the bottom and sell at the top or vice versa if you have a short position.

These are just a few of the many indicators, but they will go along way to help you max out your profits and they are easy to learn and simple to spot on the charts.