There are many different tools in the forex trader's toolbox and one of the most important important is the forex chart. Simply put, a forex chart is a graph of the performance of a particular currency pair over a fixed period of time. Reading a forex chart is critical to any forex trader’s business and so it is vital to know how to read them and to understand precisely what they mean. A forex chart will be plotted for a currency pair like the EUR/USD or USD/GBP and shows the movement of the two currencies concerned against each other over time. A EUR/USD chart, for instance, shows you how the US dollar and Euro have moved against each other over the period for which the chart has been plotted. Along the bottom of the chart you have the timeline that can for instance be divided into 15 minute, 60 minute, one day, one week, or longer time periods. Going up the right-hand side of the chart are incremental amounts that are normally fixed to run from just below to just above the lowest and highest prices achieved during the time period in question. For instance, for a EUR/USD chart the amounts may run from 1.2538 at the bottom to 1.2570 at the top. A forex chart is useful because it gives a very clear and easy to read picture of just how a currency pair is doing and you can see at a glance whether a currency is strengthening or weakening so that you can act as necessary. Choosing a time frame for a forex chart is also important and a short time scale can help you identify very minor trends and a long time scale can help you to spot longer term trends. You can find free forex charts across the Internet on various websites and many of these sites will even allow you to put charts on websites of your own. These free charts are alright for looking at trends occasionally but serious traders will have to have access to much more detailed charts that are constantly being updated in real time. Basically this means having access to suitable forex trading software that is operated through a broadband internet connection so that you are always connected. Anything less than twenty four hour access to the latest forex charts across a wide range of currencies is going to make life very hard for the serious trader. With dozens of the world's currencies being traded every day there are far too many possible currency pairs for anybody to track of them all in their heads and the advantage of the correct forex software is that it permits you to see multiple forex charts to show at a glance what your favorite currency pairs are up to. Naturally you will want to keep a close eye on those forex charts showing currencies in which you have made investments, but you will also want to keep tabs on other currency pairings which you might want to open trades in if prices move in the right direction. The ability to easily and quickly monitor the progress of a wide range of currency pairings means that you are less likely to miss a trading opportunity that could so easily pass you by without access to the correct forex charting software.
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