Forex Charting Systems And Indicators
Basic Forex Charting Setup
Indicators In Forex Charting Systems
When beginner forex traders see all of the indicators that come with most forex charting systems, they become interested in trying them. This is a natural curiosity, but is is also usually the beginning of the end of most forex trader's chances of being profitable. This is because technical indicators do not work. Some of the more common indicators that come with charting systems are fibonacci retracement, RSI, bollinger bands, etc, and there are over 150 indicators total. Traders seem possessed with having layers of fancy indicators on their charts that look great but unfortunately are all completely ineffective.
There is no proof whatsoever that these indicators work, and independent studies now indicate that technical indicators are useless. Trading the forex is a business, and having layers and layers of indicators will not make you one single pip. You must set up your charts logically and the logic must match the logic of the forex market. The Forexearlywarning trading system is highly effective at making pips across 28 pairs, and we only use exponential moving averages and audible price alerts that are available on most charting systems. We use none of the other indicators provided by all broker charting systems and third party charting systems. Beginner traders have to resist the urge to try to experiment with all of these indicators as it will wreak havoc on your trading success.
There are over 150 technical indicators with an infinite number of combinations. These indicators have caused mass confusion among currency traders and they are completely ineffective and lack any form of logic. Forex traders need simple indicators that work, at Forexearlywarning we use very simple trend indicators.
Exponential moving averages are the most important indicators in your forex charting system. This is because the Forexearlywarning system is a trend based system, focused on the higher time frames. There are several types of trend indicators available for analyzing the forex market. Using very simple exponential moving averages across multiple time frames for market analysis, and applying them to individual currencies is a clear winner for total forex market analysis, and the indicators themselves are not complicated at all. This is how we construct our forex trading plans. Using this simpler chart setup allows a trader to view the trends of the market quickly while also seeing historical levels of support and resistance on the various time frames at a glance.
Multiple Time Frame Analysis
Whatever forex charting system you choose, it must accommodate multiple time frame analysis. If you can set up your exponential moving averages across individual currencies, and you have at least 9 time frames, then you should be set. This way you can analyze individual currencies along with all 28 pairs we trade. Multiple time frame analysis is a powerful weapon for forex market analysis. It reveals everything about any currency pair, i.e. trends, oscillations, consolidations, choppiness. This is the analytical technique we use at Forexearlywarning to prepare our trading plans.
Charting System Providers
You have several choices of forex charting systems from various providers. There are charting systems provided by brokers, and there are third party charting system vendors. The charting systems provided by forex brokers are mostly free and included with your forex brokerage account, some of the third party charting system vendors charge a monthly fee for their charts. Many charting systems are downloadable, like Metatrader, and there are also web based charting systems that you can view on your browser just by logging into a website.