Why It’s Important To Understand What The Charts Are Telling You
In this video:
00:28 What’s happening on Your Charts
03:41 Why Does The Market Just Suddenly Stop
04: 42 The Best Style of Webinar For You
I wanted to talk about why is really important to understand what your charts are telling you. Let's talk about that and more right now.
Hi forex traders, it's Andrew Mitchem here. I am the Forex Trading Coach and today is Friday the 3rd of July.
The Importance of What Your Charts Are Telling You
In this video and podcast I want to talk to you more about why it's really important to understand what's happening on your charts, why looking at your charts and having an understanding of what they're telling you is so important for your success as a forex trader.
Let's talk about that.
As you would probably already know I'm a big fan of candle patterns, Japanese candle patterns. Why? Well they tell me in a really easy to understand format what's happening in the market right now. Now what's happening on the right-hand side of the chart in real time, and that's the only way you can really make money as a forex trader. Hindsight is fantastic to getting an understanding of what might happen, but right now at the right-hand side of the chart in real time is where it's all going to happen for you, your success or failure as a trader.
Candle patterns help determine that, they help show me that in a pictorial form. I can look at the price axis and see what the actual price is, but a quick glance at a candle pattern and it can tell me whether the currency pair is in indecisive mode where it's going sideways and range bad, or whether we're currently in good strong trends. That can help me so much because let's say for example the market is going sideways and there's indecision within the candle patterns, lots of pin bars and lots of dodgy style candles. It's telling me that really neither the buyers nor the sellers are in control overall of the market right now.
That's looking at the time frame of the chart that I'm looking at. Nobody is really in control. There's no strong uptrend, there's no strong downtrend, really always in sideways action on the markets. What that is telling me is really if I'm looking to place a new trade why would I bother looking at that particular currency pair, move on and look at another currency pair. What I'm really looking for is a currency pair that's showing me a good strong trend right now.
So what can you do? Well you can then get into the market if you see an opportunity for a new position. Or what you can do is if you were in a big strong uptrend you can then wait for a pullback, wait for a retracement, and get in at a lower price, a better price than what the market is giving you right now.
Then once you see bullish candle patterns after a retracement, after a pullback, then it's a great opportunity to jump in with buy trades and ride the market back up again in the overall direction. But after it's had that breather, after it's had that room to pullback and retracements.
Because no market does that, no market goes straight up. Price would always go up and down and come back and go up again and pullback, always having retracements within any movement, so always look for those opportunities to wait for the pullback. Right now the market is going against your overall direction and then wait for that opportunity to buy again in that uptrend, and exactly the same in reverse, obviously, for a sell trade.
That's the way I really like to look at trades. If I'm in a trade right now and I see a series of indecision candles, dodgy candles, the price not really moving, then I need to start thinking, well why is that? If I'm at a buy trend right now and all of a sudden the market suddenly goes flat, is it the time of day, have we hit a resistance level in terms of the price, or a pivot point or a previous swing high?
Why Does The Market Just Suddenly Stop
Why is it that all of a sudden after a nice big strong trend and I'm in currently into really good profit let's say, why does the market just suddenly stop?
I need to make a decision there. Am I then at that point going to close my trade, part of it, all of it? I'm anticipating potentially after some stalling we might then be getting that reversal that I'm talking about, that pullback, that retracement.
Do I want to wait for that retracement to happen and remain in the market? Or;
Do I want to exit my position at a fairly decent profit and then wait for a retracement and then look to re-enter again?
Those are the decisions you need to make, but the price action and candle patterns can really help you with that.
If you'd like to know more what I really suggest you do is jump onto one of the webinars that I hold, free webinars each week. I have a webinar if you're brand new to trading, if you've been trading for let's say less than six months, and I have another type of webinar that is designed for people who are probably more frustrated with their trading, who've been trading for quite a while but it's just not happening for you yet.
The Best Style of Webinar For You
Decide which is the best style of webinar for you, either new traders or slightly more experienced traders, jump onto one of those two webinars and I'll give you some really great information and tips to help you progress further with your forex trading.
Once again, this is Andrew Mitchem here. I'm the Forex Trading Coach.
Thanks for watching. Don't forget that if you do have any topics or trading conversations you'd like me to discuss on future videos and podcasts exactly like this just send me an email [email protected] and I'll answer those on future editions for you.
Talk to you then. Bye.