Forex Trading, Forex Trading Strategies, Forex Rates, International Trade

The most popular type of trading style is the Technical Method. Traders of this type often use various types of indicator tools to guide them on their analysis regarding about the future direction of the forex market.

The most basic tool of a Technical Trader are the three different types of charts which are the Line, Bar, and Candle Stick. The Line Chart is the simplest chart among the three where the highest and the lowest prices are directly connected to form the lines.

The Bar Chart and the Candle Stick provides almost the same data except on their appearance. Please refer on the image posted below regarding about how they look like.

Most Technical Traders prefer to use the Candle Stick type of chart because it provides all of the necessary data such as the High, Low and Close price. It also has the best figure that clearly illustrates the behavior of the market’s volatility.

Bar Chart can also indicate data as of with the Candle Stick and there are still some traders who prefer to use this chart on their trading analysis.

However, using these three different types of charts on your analysis will provide the best result. Further details about forex charts are the Time Frames. You can view the behavior or volatility of the market on a closer look by adjusting the Time Frame of your trading platform. The most commonly used are the 1, 5, 15, minutes, 1, 4, hours, weeks and months.

Starting from the 1 minute to 1 hour period, these are used by the traders known as “Scalpers”. They open their trades for just a short period of time and when they managed to gain a small amount of profit they will immediately close that position. This for of trading style is very risky that only professionals can successfully use.

The 4 hours to 1 day Time Frame are used by the Day Traders. They only open a position once for every given period of a single day. This form of trading style is the most suggested method to adapt especially to all beginners because less risk is involve.

The longest period starts from 1 week to months. Other FX Brokers even provide years. This chart period are often used by Long-Term Traders. Their trading style works by letting their position run for a long period of time until they manage to achieve their target profit.

Line Chart

Moreover, Technical Trader’s analysis are solely based on the past historic data of the market prices. They believe that the previous price action of the market will repeat itself. This can be proven by studying chart patterns where it’s the best method for Newbies to start learning their first strategy.