When you trade forex live you need to know how to analyse the market. One of the most common ways to do this is through technical analysis. Technical analysis is the analysis of charts patterns and price movements. There are a two ways that this can be done and they are through technical indicators and through the chart patterns. It is important that you know how you can use chart patterns to trade on the forex market.
Should You Use Patterns or Indicators?
Like many things on the forex live market choosing between patterns and indicators is a personal preference. When you look at these two technical analysis methods you have to consider which you are more comfortable with. If you do not feel that chart pattern trading is just not right for you then you need to look at technical indicators.
Of course, there are some traders who use both patterns and indicators. When traders do this they often increase the number of opportunities that they have to trade one. If you decide to use both methods you do need to be careful. You have chosen your indicators for a reason and the patterns you look at may not relate to the same strategy.
What Patterns Tell You About Forex Live
One the forex live market there are two things that chart patterns can tell you. The first thing is that the trend you are looking at will continue in the same direction. The second thing is that the trend will reverse or retrace. This information is actually very important for all traders because trend movement is what drives the market.
If you are unable to determine what a trend is going to do then you could have a problem on the forex market. Trends are present at all times of the market even in range market. Of course, in the range market some traders state that the fluctuations are not actually trends.
What Patterns You Need
There are a lot of new traders who assume that you need to know certain patterns for certain trading strategies. While there are some common patterns that suit all strategies there are others which should be used for short or long-term trading. There are some traders who only use the most common patterns and make a profit from the market. It is important that you know these common patterns and then you can determine if you need to know the other patterns.
A lot of new traders learn about the patterns they should look for and then never seem to find them on the charts. New traders should first look at the common patterns because they are the easiest to identify. Only once you have mastered finding these patterns should you move on to the more specialised patterns.
There are some expert traders who state that identifying patterns is something you learn as you trade. These traders believe that the only way you can truly learn to identify patterns is through practise. Pattern identification can take time and you should practise this before you trade on the lie market.