An advantage of using analysis software for your trades in the foreign exchange market is its reward of letting you access hundreds of charts and indicators; while others were created and developed by amateurs, the rest are the brainchild of the most successful Forex traders. With the feature, you can make better predictions regarding your own tools, as well as different market elements.
Particularly, the employment of forex analysis software comes with two privileges: (1) you can review basic data based on news releases and historical information and (2) you can receive updates on currency and interest rates, (current) market conditions, market timing, market volatility, and price action, among various important factors. Especially if you have high hopes as you set eventual trades, forex analysis software can be extremely helpful in your trading career.
The Importance of Charts
With forex analysis software, chart-based trading is possible; with regard to the general price direction, you can strategize accordingly. Depending on a particular chart type, you can be informed of necessary details such as opening and closing prices, (current) trading volume, and upward and downward trends. With a lineup of available charts, a trader, whether he’s a novice or he’s an expert in the forex market, is bound to have a profitable undertaking.
Common charts include:
- Bar charts
- Line charts
- Heikein-Ashi
- Renko
- Point & figure charts
The Importance of Indicators
Due to the availability of various indicators when using analysis software, you can make reliable interpretations based on both previous and modern market events; instead of turning to just any data, you can be in on the strongest trends, and probable patterns. It promotes in-depth analysis by letting you investigate a security’s value clearly; you can gauge a security’s strength, weakness, and profitability, as well as its impact on an economy’s supply and demand levels.
With forex analysis software and a selection of useful indicators, among the list of accomplishable tasks are eliminating market noise, identifying (even the slightest) changes, disregarding misleading signals, and basically, disregarding insignificant market movements. As a result, you can understand the forex market’s behavior prior to the placement of trades.
Common indicators include:
- Average Directional Movement;
- Commodity Channel Index (CCI) – read more about it here;
- Elliot Wave Oscillator;
- Linear regression;
- Money Flow Index (MFI);
- Moving Average Convergence – Divergence (MACD);
- Relative Strength Index (RSI).