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A chart is like a map - that guides the trader. Just because you have a map in your hand doesn't mean you won't get lost. Here's what you need to need with a map:- First, you need to be able to read and understand the map.
- Second, you need to identify your destination and
- Third and most importantly, you need to plan your route and expect some unexpected problems
Same goes for your charts.
Where do I get Forex Charts?
If you already signed up for a demo account - your forex broker should have some free charting software. However, there are many charting packages available on the web - some free, some paid subscriptions. There is a list of available chart at the end of this lesson. Before you dive into any paid subscriptions, we urge you to study the free ones.
How do Forex charts work?
Charts records and display the movement of price along with the timeline. Charts are primarily important to read the historic data of the price - to predict the future. Various tools are used in this process. We will get into this in detail in the coming lessons/chapters.
Visual Stimulation
Some people understand pie-diagrams better than bar-diagrams other might line-diagrams - everyone has their own comfort zone. That's why we recommend you to try various charts before you settle on one thing.
Charts that read minds
Believe it or not! - you can read the minds of traders and their collective psychology using the charts - for example, if EUR/USD pair last year touched 1.3500 and went down and never came back to "test" that number again until today - then every trader will be cautious to trade ABOVE that number - because it is now considered to be a market "resistance".
IF we never saw the chart - we would've have missed out that important point. How we profit from "resistance" is explain in the next chapter.
If you are thinking! - OK! I am lost!!! - don't worry, the point here is NOT to learn about resistance - but to learn that charts provide CRUCIAL points based on historic data. We will learn to identify and use these CRUCIAL points on the chart to our profit in the coming chapters.
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