Basic Elements of Live Forex Charts
You cannot be a limousine driver without a limousine. In the same way, you cannot be a Forex Trader without live Forex charts. In this article we will discuss the most important elements of the live Forex charts and how they would impact your trade.
Ticks
Tick… tick … tick. Said my grandfather’s clock. Little did I know then that ticks would rule the life of Forex Trader.
A tick is the smallest denomination of time between the update of Forex rates. At every tick the authority announcing the rate declares it.
Imagine that you are actually never updated on the first tick. The reason is that your bank or broker has to react to that tick and update their own servers. The best brokers provide 2-tick live charts. This is done normally in their office premises which are located close to their data centers.
People connected to the brokers over the internet are often served 5 to 10 ticks later. For people who are not looking to trade in short- term may not be impacted by these ticks but for those who chase the rising and falling knives, these ticks provide the ultimate edge.
Various timeframes
The live Forex charts should be available in various time intervals. It is important to look at the live Forex charts and their progress in various timeframes. A currency pair may seem to fall in the 1min live chart and it may seem to continue the upward trend in the 1hr live chart.
Looking at the various timeframes is important as you may have various goals. You may trade the same currency pair for short term and sometimes go long on the same pair.
Charting tools
You should have a variety of live charting tools available to you. Some of the most important tools are:
- Cross hair displays : The cross hair display helps in reading the chart. The information that is displayed in conjunction with the cross hair is equally important. You will be able to make better assessments with more informative cross hair displays.
- Draw trend lines: You should be able to draw and extend the trend lines. This will assist you in pinpointing the peaks and the valleys. This is absolutely necessary to place your bids for buy or sell.
- Fibonacci tools – These are set of tools that have the Fibonacci sequence at the heart of their calculations. This sequence is a natural occurrence and almost all traders believe in it. There are Fibonacci retracement lines, circles, fans and many more.
- Elliot Wave – Elliot wave is another tool to assess the movement purely on a technical basis. This charting tool is normally accessible only in the best live charting systems.
- Tick display type – You should have the ability to display the ticks as candlestick, bar or line. There are many prediction systems based on a display like the candlestick.
Summary
A live Forex chart is essential for any Forex Trader. There are three critical areas that the charting system should contain. It should display the rates after the least amount of ticks possible. The system should be flexible and show the same currency pair in various time frames. There are a series of tools that should be built into the live charting system. All these elements provide an edge to a professional Forex Trader.
