I explain how to do my method of technical analysis in a later article which I will post under the free forex strategy category cross referenced with forex time charts.

Forex Time Charts – Currency Pairs I Trade

The forex currency pairs charts that I trade most of the time are EURUSD, GBPUSD, EURJPY and AUDUSD

Each morning I look at 4 forex time charts for the various currency pairs that I trade as per my current currency trading plan and in line with my overall trading strategies.

The charts that I open are the Daily, 240 minute, 30 minute 5 minute and then trade the 2 minute chart.

Why do I do this the answer is simple it will help me make more money in the forex market and technical analysis is all about following and learning from previous price action. I choose different forex time charts which give me a broad view of what’s happening in the forex market right down to a micro level using real time forex charts.

Now what does each chart tell me?  By the way forex charts are normally available free from your forex broker or spread betting company.

Technical Analysis With Forex Time Charts

Forex Time Charts I Use

Daily Chart
This chart gives me the longer term trend, I also look from time to time at the weekly chart and the monthly chart too, but every day I check the daily chart.

240 minute chart
This gives me a perspective of the most recent trend

30 minute chart
This gives me a perspective on the previous day’s trend

5 minute chart
As I trade the European session even when I travel overseas this will give me the Asian market trend and what has happened overnight. I mark up the highs and lows of that trading session.

2 minute chart
Finally this is the forex time chart that I trade from and I consider it to be the best of my forex time charts for helping me to enter the markets at the best price. I find anything shorter in terms of time frame is too jumpy for me and anything longer does not give me enough of feel for the market and would give a greater risk to my trade.

Forex Time Charts: Improve Your Forex Trading is a post from: Great Forex World

As the name suggests, it shows the convergence (coming together) or divergence (moving apart) of two exponential moving averages, one of which is fast and the other slow.The indicator was invented by a New York stock analyst named Gerald Appel in the 1970s.

Designed for the stock market, it nevertheless can be applied very well in other markets including forex.On the MACD chart you will see two lines. One tracks the average of the difference between the two moving averages mentioned. Example settings for those might be 12 and 26 period moving averages.

The other line on the chart is an exponential moving average of the MACD line itself, with a typical setting of 9. This is used as a signal line.There are two simple ways to use the MACD. The first is to open a trade on the crossover of the two lines. If the faster line (the signal line) crosses the other from above, that can be treated as a signal to buy. If it crosses from below, that can be a signal to sell.This can form the basis of a simple forex trading system which can be refined by checking the MACD in a second time frame. For example in day trading, look for the crossover on an hourly or 30 minute chart before moving in to the shorter time frame to make the trade.

Then watch the higher time frame again for a signal that the trend is ending.It is always best to consult the higher time frame first when trading on the basis of this indicator. This helps to prevent problems caused by trading against a longer term trend.MACD can also be used to indicate overbought and oversold markets. When both lines are significantly above zero, the market can be said to be overbought. When they both fall significantly below zero, it is oversold.

The chart also includes a histogram giving a visual indication of convergence or divergence between the two lines. If the histogram is growing smaller, the lines are coming together. This can indicate that a crossover is approaching. The histogram is at zero when crossover occurs.MACD is a lagging indicator and is prone to whipsaws when the market changes. Traders can be badly caught out.

This is particularly true in the stock market where traders are relying less on the MACD these days. However, the MACD chart is still a useful provider of trading signals in many other markets, including forex.

MACD Chart In Forex Trading is a post from: Great Forex World

The Relative Strength Index is a momentum oscillator. It compares the price gains of a stock or currency pair to its losses and expresses this as a number between zero and 100. A trader can use the resulting number to determine when a market may be overbought or oversold.

When you have the RSI showing on your forex charting system, you can set horizontal lines at the points that you want to use as triggers. Generally, if the RSI is below 30 the market is oversold and heading for a reversal. If over 70, the market is overbought.

Therefore, most traders set their marker lines at either 30 and 70, 25 and 75 or 20 and 80. When the RSI crosses these lines they have a signal to buy or sell the currency pair.

Clearly, if you use the weaker signal of 30 and 70 to open a trade you will be getting in on a trend nearer to the beginning with the expectation of making bigger profits, but at the same time you are likely to get more false signals resulting in losing trades. Waiting for the stronger signal of 20/80 will bring you more winning trades but with a little less profit per trade, other things being equal.

Of course, you should never use only the RSI to determine when to open a trade. While it is a very quick and simple method of identifying new trends, you will always need to confirm by checking against the stochastic or another indicator. It depends on your overall strategy as to whether you prefer to take a bullish or bearish perspective on events.

If you prefer to follow trends rather than watching for reversals, you can use the RSI as a confirmation of a newly forming trend. You would generally identify first signals from another indicator and then check the RSI. If you are expecting an upward trend, you would be looking for an RSI above 50. This tells you that the recent price gains are higher than the recent price falls, so you have a bullish signal. A downtrend would be confirmed by an RSI below 50.

Like many indicators the RSI depends on the results of price movements in the recent past. It will be more or less accurate depending on the number of time periods that are used. In some charting packages you can alter this. The lowest that most traders would go would be 14 periods. If you increase it, you will have a more accurate index but the new trend will not be identifiable so soon. So just like when you set the marker lines for the RSI on your forex charting, you have to choose between more wins and lower profits per successful trade, or fewer winning trades but higher profits on each one.

Forex Charting: Using The RSI is a post from: Great Forex World