Forex Chart Guide: Forex Forecast Tool or Voodoo?

Forex charts help the investor by providing a visual representation of exchange rate fluctuations. Many variables affect exchange rates, such as interest rates, banking policies, geopolitics, and even the time of day can affect exchange rates.

To help the investor try to predict when or in what direction the exchange rate may change, advisors provide forex charts. Quality forex websites provide subscribers with a daily newsletter that includes a forex chart, forex signals and forex forecast.

There are various forex charts available that the investor can use and study. Some are very simple, using only a few forex signals or indicators and are ideal for beginners. Others include 30 or 40 forex signals or indicators and online streaming so that the investor can analyze trades quickly and accurately.

To make an accurate forex forecast, it seems that the more indicators, the better, but some analysts prefer a simpler system.

The idea behind studying forex charts is that history repeats itself. Instead of trying to “see the future”, the currency forecast evaluates the past. This means that the analyst, who is responsible for trying to predict future currency movements, analyzes what happened to the exchange rate yesterday, last week, last month or last year and uses this knowledge to the best of his knowledge. how.

Some people trade short-term, others intermediate, and others long-term. All three types of traders can benefit from the use of forex charts, simply adapted to their own trading time frame.

Investors also create their own forex charts to evaluate their own performance. Creating a forex strategy for yourself is the goal of many investors. Instead of turning to a professional to analyze currency signals, these investors choose to create their own forex forecast.

However, others create their own strategy, but also follow the opinions of professional currency traders at the same time. It all depends on your personal preferences.

There are other forex charts that deal with some correlations between two currency pairs, that is, how they move relative to each other. It is known that some exchange rates affect other exchange rates, either by moving in the same or opposite direction depending on the correlation.

Graphs are available that explain these correlations in detail and show which pairs have strong correlations or strong negative correlations, so that the investor can use the movement of the exchange rate of one currency as a signal to trade with another currency. These correlations are also the basis for some forex predictions.

Entering the world of forex trading can be difficult and insurmountable. Experts recommend education, practice with a demo account and advice from a reputable broker, supported by a quality institution. Learning to read forex charts and evaluate forex signals is a skill that comes with time, skills that are essential when the goal is an accurate forex forecast.