We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • The Australian Dollar and New Zealand Dollar tend to rise with stocks. They have recently fallen despite gains in the #SP500. What does this mean for $AUDUSD and $NZDUSD ahead? #AUD #NZD #RBA #RBNZ - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/17/AUDUSD-NZDUSD-Outlook-Looks-Past-Stocks-to-Rate-Cut-Bets.html?CHID=9&QPID=917702 https://t.co/ddf2fV7Kyl
  • A few snippets from today's commentary. Check out the link below for the full story (via @DailyFX). https://t.co/I31tuq764r https://t.co/x0BaiOFA1P
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/e2YrN3dBrl
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.00%, while traders in France 40 are at opposite extremes with 79.59%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/UL7hqSD2Ki
  • US Dollar Forecast: $USD Lacking Impetus Ahead of Consumer Sentiment #Forex traders shift focus away from US-China trade deal headlines - perhaps toward the monthly release of #ConsumerSentiment data for volatility and clues on the Greenback's next move https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2020/01/16/us-dollar-forecast-usd-lacking-impetus-ahead-of-consumer-sentiment.html
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.11% 🇦🇺AUD: -0.02% 🇯🇵JPY: -0.03% 🇨🇭CHF: -0.05% 🇬🇧GBP: -0.06% 🇨🇦CAD: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Kxcb9EtIWb
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.45% France 40: 0.26% Wall Street: 0.07% US 500: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/I5YIsKQAog
  • 🇯🇵 JPY Tertiary Industry Index (MoM) (NOV), Actual: 1.3% Expected: 1.0% Previous: -5.2% https://www.dailyfx.com/economic-calendar#2020-01-17
  • The $JPY has weakened as a bounce-back in risk appetite saps haven-asset demand. However, the old uptrend line still provides clear resistance. Get your market update from @DavidCottleFX HERE:https://t.co/IMhgQ9jbF9 https://t.co/I7087olftk
  • Heads Up:🇯🇵 JPY Tertiary Industry Index (MoM) (NOV) due at 04:30 GMT (15min), Actual: N/A Expected: 1.0% Previous: -4.6% https://www.dailyfx.com/economic-calendar#2020-01-17
Don't Fall Into This Trap When Using Your Charts

Don't Fall Into This Trap When Using Your Charts

2012-03-20 03:00:00
Richard Krivo, Trading Instructor
Share:

Since no one has that magical crystal ball that is going to tell us how a currency pair is going to move going forward, all traders use charts to make their trading analyses. The value of charts is that they show us the history of how a pair has moved over time. This history, for example, can show us price levels that the pair had trouble moving up through (resistance) or down through (support). Information such as this is invaluable when determining such things as our entries along with where to place our stops and limits.

When traders however become too granular when viewing their charts and they expand them to the point that they may only be viewing a few dozen or so candles, they lose one of the primary benefits that the chart provides: the big picture.

Let's take a look at these two views of the AUDCHF Daily chart below...

On the first chart we are looking at 54 trading days of information. Based solely on this amount of data, if you tried to determine the trend on the pair so that you knew if the pair had a bullish bias or a bearish bias to it, what would your answer be? I don't know about you, but I would be hard pressed to come up with a direction that I could technically justify.

Dont_Fall_Into_This_Trap_When_Using_Your_Charts_body_audchf_sun.png, Don't Fall Into This Trap When Using Your Charts

The second chart on the other hand has roughly one year's worth of trading data on it as opposed to 54 days. Looking at the "big picture" regarding this AUDCHF currency pair, there is no question about which way this pair has been moving since about the middle of August of 2011. Based on this information we would want to look for buying opportunities on this pair.

Seeing how a pair has been moving over the longer term and with a "full view" can definitely resolve some questions.

Once the longer term charts have been checked out in an expanded view and the trend has been determined, then and only then is it OK to "get granular" and check out the shorter time frames and "expand the view" of all the charts for more detail if needed. The shorter time frames and the expanded chart views on their own, without getting the bigger picture, can oftentimes be misleading.

Dont_Fall_Into_This_Trap_When_Using_Your_Charts_body_audchf_sun_daily.png, Don't Fall Into This Trap When Using Your Charts

Here is a general breakdown on how far back a trader should look on some of the more popular trading time frames to obtain a good "feel" for how the pair has been moving...

15 Minute Chart: 3 - 5 Trading Days

30 and 60 Minute Charts: 2 Weeks

4 Hour Chart: 4 - 6 Weeks

Daily Chart: 1 Year

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.