Forex Trading Charts
Tick charts? Time Intervals? Range Bars? Renko Bars? Daily, weekly, hourly? Here’s my favorite forex trading charts to use.
One of the main costs for traders, besides commissions and fees, is the cost of trading platforms and data. Depending on your setup, you are looking at a few hundred dollars minimum per month. In Forex however, many brokers actually offer free Forex trading charts to help people become active in the market.
For many people, once you open an account at a Forex broker, you have immediate access to the Forex trading charts that they offer their customers. Often times, it is the popular Metatrader charting package that is supplied. Since brokers in Forex are also the market maker, the data comes directly from them and not through an exchange. This will save you costs on data feed which, depending on markets traded, can become quite expensive.
On the other side of the trading coin, you have charting packages for Forex such as Ninja Trader, Tradestation and ThinkorSwim. You can also count on various brokers offering their own custom charting as well as independent trading companies that have designed software to fit their needs.
What Makes For Good Forex Trading Charts?
Ease of use for any platform is essential. You don’t want to take weeks to become proficient in the software which will take away from your trading time.
Downloading and setup should be straightforward. Many charting packages do come with detailed setup instructions and user manuals which can lessen the learning curve.
Charting packages comes with a large assortment of trading indicators for a variety of different trading strategies. Pour through any of the Online Forex Trade Resources for trading strategies and you will most likely find the required indicators in your charting package. There is no need to code your own indicators as the plethora of indicators available can be overwhelming.
I like to see on the chart where my trade has taken place. This is done through horizontal lines and some charts use arrows. If that is important to you, ensure any of the Forex trading charts you are looking at offers that feature.
Some even offer “on chart trading” where you simply click the trading screen and the order is entered. I find this to be an incredible time saver.
Types Of Price Display
You can plot price on the chart utilizing a few different types of plots.
The most popular is the Japanese candlestick which plots in different colors and you are able to quickly see if who won the bull/bear battle.
For my Forex trading, I usually use OHLC (open, high, low, close) bars and am not distracted by the red/green colors. Since I am not using the colors to dictate what I am to do, I keep my screen easy on the eyes.
These are Heiken Ashi candles and you can see they look similar to the candlestick. The difference is the calculation used to plot the candles. This type of candle is really good at showing the trend of the price.
Types of Measure
You can use time based charts and those are the most popular way to plot price. However, if your Forex trading charts offers other types of unit measures, you may find the following useful in your trading.
Range Bars: Plots a new bar only when a certain range has been achieved. For example: You only want a new candle printed when a price range of 10 pips has been achieved. Each candle will be the same size, time is not a factor and I think you get a better “read” of the current market conditions.
Renko (Brick) Bars: These really filter out the noise of upper and lower shadows. They make it extremely easy to note the trend. You simply set the number of pips to make a brick and a new brick forms when those pips have been met.
Volume Bars: While volume bars work great in other markets, in the spot Forex market, there is not a central exchange and therefore no accurate measure of volume.
For most traders, Metatrader should be sufficient for your needs.
The Forex trading charts offered by Metatrader do not offer anything but time based charts. Netpicks has changed that and is offering free to any trader the ability to plot both Range and Renko bars on Metatrader. You can download both plugins for your Metatrader Forex trading charts here: http://www.netpicks.com/quantumleap/