Traders of stocks are often surprised to discover that currency charts look just like stock charts. Price is plotted on a screen and various technical indicators can be used to analyze that price action over time.
There are some differences however. For example, Forex charts run for 24 hours a day, five days a week. This is because the currency market is a 24 hour a day market. Except on the weekends, someone in the world is exchanging one currency for another one. So this is different than the U.S. stock market, for example, where the main trading session is only six and half hours long (not counting pre-market and after-market activity).
During those 24 hour trading sessions, there are times of low volatility and high volatility. The period from 1:00 AM Eastern until noon is the period of highest volume because we have the London session crossing over with the U.S. session during that time. But currency charts keep perking along, regardless of the time of day.
One of the other differences between stock charts and Forex charts is the fact that a stock chart plots the price of one stock whereas a currency chart plots two currencies on the same chart. For example, you don't just trade the U.S. dollar. You trade the U.S. dollar versus the Euro or versus the British Pound (to name two examples).
Charts for trading Forex are often free from the Forex broker. MT4 is the typical chart and trading platform used. Some of the larger brokers that deal with both stocks and currencies might have different charts available. Personally, I find the MT4 charts very limiting and cumbersome. While some brokers offer other trading platforms, even allowing you to trade via a phone app, the charts are quite limited.
If you are a technical trader, then you will want access to a variety of indicators for analyzing price action. Unfortunately, the MT4 charts are very limited in this regard. For example, one of my favorite indicators in Coppock Curve and the MT4 charts do not offer this. There are third party sources for some special indicators, and you can always hire someone to write a code (EA = expert advisor code) for your MT4 platform. But, personally speaking, I prefer a chart source that has plenty of indicators readily available and that also makes it easy for me to scan, sort, and draw on the charts with ease. Because of this, my preference is the platinum version of TC2000 available here.
As you can see on the above chart, the TC2000 chart allows me to set alerts for various indicators, make quick drawings, and create multiple linked panels so that I can analyze a currency from several perspectives at once. Of course, if you only trade price action, then a simple bar chart may be all that you need. But more robust studies will require you to spend a bit more money.
Books on Forex Trading:
(simply click the cover image for immediate viewing)
There is a free version available from Worden that offers a limited version of the chart just mentioned. This is available by clicking here: currency charts.
I hope this discussion has been helpful for you.
I have used TC2000 as my main day trading platform for 8 years. When I started trading Forex, over 4 years ago, I didn't have to go search for a charting service. I already had it: TC2000.
The currency charts in TC2000 are robust and I cannot imagine trading currencies without them.
So, take the plunge and get the best charting platform around...so you can do your best trading.
Click the link at the top of this column and give TC2000 a whirl. (The Platinum level is the only way to go.)
- Bob Joiner