Best Charts for Forex Traders
As forex trading grows in popularity, it is a good idea for traders to have a strong sense of the techniques and strategies that tend to produce profitable results for those with more experience. When we look at traditional investments, most of the attention was focused on the market fundamentals that generally go into fundamental analysis trading.
Of course, this is no longer the case as many newer traders focus exclusively on price charts that enable for excellent entry and exit points for each position. But there a few different approaches that can be taken when conducting this type of analysis and the first part of the process is to identify which advantages and disadvantages are associated with the major chart types in forex.
Advantages and Disadvantages
Most traders that are using technical analysis as a basis for their trades tend to use candlestick charts in their trading. On the downside, candlestick charts can clutter price action and make it difficult so see prices in their purest forms. This is why practitioners of Elliott Wave will rarely use candlestick charts and this is also why it is a good idea for traders to choose a broker that offers a wide variety of chart types. In my own trading experience, one of the best platforms for this is the cTrader Platform, which is offered by FiboGroup. This offering is also excellent in terms of its demo account, as it does not include many of the restrictions that are typically seen.
On the positive side, candlestick charts can give traders a good deal of information as to what is happening to prices for any given interval. It should be remembered that technical analysis is, in essence, a study of active sentiment in the market. Many would argue that candlestick charts are the only charts that are truly sufficient for determining where sentiment in the market currently rests. This is because only candlestick charts can show you the open, close, high, and low with the same level of detail.
So when you are defining your strategies it is important to keep all of these factors in mind. Candlestick charts tend to be preferred by most of the technical analysis community but there are some sections of the market that believe these charts are too muddled. This can make it difficult to view market information in an objective way, so keep this in mind when determining your regular trading routine.