Understanding Free Forex Charts
A chart is typically composed of an x-axis (horizontal) and a y-axis (vertical). When it comes to charts, the x-axis represents the time while the y-axis represents the currency price. Free forex charts are the graphical representations derived on graphs that display how prices shift on particular currency pair within a specified period of time. The time frame on the free forex charts can be customized by the trader depending on the scenario and can range from a few minutes to days, weeks and even months.
When teamed up with technical analysis, free forex charts are time efficient workable tools that are very important in currency trade. Contrary to common myth that free foreign exchange charts can be used to predict future changes in currency prices, they cannot. However, this does not mean that free forex charts are not important when conducting currency trade, they are. The huge advantage of free charts is that they capture human weaknesses of fear and greed and plot them on at no cost. It is in human nature to be greedy and fearful of losing what they have, and this is evident in forex trade. When foreign exchange traders are greedy, ‘hot’ currency pairs rise in demand, lowering prices. However, when there is fear, investors hold back, causing price to shoot up. Free forex graphs are designed specially to capture these moments and equip smart foreign exchange investors.
The success of free graphs is largely dependent on robust currency management and well researched strategy. A trader who learns to maximize on the greed and fear of other foreign exchange traders can utilize the free chart to effectively map a way forward to maximize forex trading profitability within a certain period of time.
What most foreign exchange traders fail to understand is how exactly free forex charts work. Free foreign exchange graphs are simple to understand because prices in the foreign exchange trade vary with time. The prices change in undefined trends, and these trends can last for hours, days, weeks, months and even years. Smart foreign exchange traders can utilize free graphs to lock into price trends and make big profits.
There are three basic logical situations that determine the trends of free graphs: the first is human psychology, which shown in high odds in chart formations, is constant. The second logic is that trends develop once and tend to persist while the third logic is that when there is a certain trend in motion, there is a high probability in it continuing than reversing.
