Many forex traders think that you can never win with forex charts, because you need to know the supply and demand fundamentals. On the other hand, there are those forex chartists who believe the charts reflect human nature which is constant and prices can be predicted. Who is right? The answer is forex charts work - but we must get rid of one misconception about them before we start and that's there are a predictive tool - They are not!
Forex prices do not move to a scientific theory, because if they did, we would all know the price in advance and there would be no market!
Common sense really - but don't think you can't make money with forex charts and technical analysis you can, just understand this equation:
Supply and demand (fundamentals) + Investor psychology = Price
The above equation brings me on to my next point and it's obvious from the above:
The fundamentals are un-important its how they are perceived that determines the course of events.
All forex technical analysis does is:
Make the assumption that the fundamentals are instantly discounted in the price and it's investors who will decide which way prices will go.
It is the forex traders (all of them combined) who make the price and they all see the fundamentals and supply and demand facts - but they all draw different conclusions from what they see. This is why investor psychology is vital to where prices may go.
Humans determine the price of anything in a free market and its their perception of facts that is so important.
Investor Psychology
Forex charts allow you to see the fundamental picture and the how investors react to it, all in one method and that's a huge advantage.
So forex technical analysis takes into account the supply and demand facts and how investors perceive them - it's a short cut form of fundamental analysis and it lets you see graphically on a forex chart how investors have reacted.
Now we said that forex chart were not scientific - but you can trade the odds with them.
This is because human psychology is reflected in the charts and human nature never changes - so you will have patterns repeat and repeat overtime as does human nature, as it never changes.
Trade the Odds
With forex charts your aim is to look for these high odds chart patterns and trade them for profit.
You wont win every trade but if you win more than you lose and you run your profits and cut your losses, you can enjoy currency trading success.
Charting is an art not a science but an art.
If you get the right forex education and do your homework, you will have found a great way to achieve long term forex trading success.
When you have a forex trading strategy based upon forex charts, you are the equivalent of a captain of a ship at sea.
Your charts can help you earn a living in a hostile (but lucrative) environment, if you learn to use your charts correctly, or if you don't, you will hit the rocks and drown. The choice is yours.
A Simple Powerful Route to Forex Profits
Forex charts are if learned correctly, are a simple time efficient way, of earning huge profits from the effort you put in - so try and base your forex trading system on them and you could soon be earning big consistent FX profits.
I recommend Forex Killer for the best charts,but if you want something free , SaxoBank Forex Charts is good too.
