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How to read the Forex charts like a pro trader

  • April 21, 2021

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Everyone is looking for an alternative source of income. By diversifying the income stream, rookie traders can easily secure financial stability and lead their dream life. After exploring the different sources of cash flow, the majority of the investors are preferring to trade in the Forex market. Accessing the retail trading industry is a very easy task and anyone can start trading with very small capital. But having access to the retail trndustry is not enough. To securely trade the market, you must learn to read the Forex charts like a pro trader.

Today, we are going to highlight some amazing tips by which you can improve your trade execution process. Read this article and follow the tips carefully.

Selection of the trading platform

To read the Forex chart properly, you need a high-end trading platform. If you rely on a low-end trading platform, chances are very high that you will not be able to execute the trades professionally. Most of the low-end trading platforms don’t provide accurate price feed. So, you will struggle to analyze the data with real-time market dynamics. So, select your broker very carefully and ensure a professional trading environment. Instead of trading with real money, start learning things in the demo account. Make yourself comfortable with the demo trading platform and improve your chance of making a profit.

Analyze the candlestick charts

The professional traders at Saxo bank always analyze the candlestick charts. If you intend to use the line chart, you are not going to get critical information regarding the opening and closing price of the candle. With the help of the candlestick charts, you can analyze the strength of the buyers and sellers. Once you become comfortable with the candlestick chart pattern trading strategy, you can slowly improve your skills and try to take the trades at the major support and resistance level.  If you manage to learn about the candlestick pattern, you can expect to decipher the critical movements in the Forex market. So, take your time and learn to use the candlestick patterns professionally.

Analyze the support and resistance

To read the Forex chart properly, you need to have the skills to analyze the support and resistance level properly. Without analyzing the support and resistance level, no one can succeed as a trader. New traders might not know that the support and resistance level drawn in the lower time frame is not that accurate. Take your time and evaluate the trade setups in the higher time frame. Though it will be boring, it is the most effective way to determine the quality trade signals. Never look for the shortcut method at trading. Use logic to define the critical buying and selling zone.

False spikes

At times, the market will print extreme false spikes in the chart. These spikes are usually formed right after the news release. So, try to study these spikes and relate them with the fundamental data. By doing so, you will improve your trade execution process and make things much easier. However, you can also avoid taking the trades during the high-impact news. Once you start avoiding the major news release, you don’t have to deal with such big spikes. Eventually, your performance will improve and you will become more confident with your trade execution process.

Chart patterns

Always look for the major chart patterns while analyzing the chart. If you become good at analyzing the chart pattern, you can easily improve your trading skills and make big progress without having much trouble. Never think you know everything about this market. Take your time and use the demo account to develop your skills. Start with the basic chart patterns. Once you become confident with the chart pattern trading strategy, you can easily trade like a pro trader.