​How Senior Traders Read Trading Charts?

WikiFX Strategy (13 Jan.) - Chart reading is essential for almost every trader to make decisions. Some tips regarding the technique are listed as follows:

Lessons from experts who have traded forex for 20 years on the WikiFX (bit.ly/wikifxIN)

1. Overall trends

The highs and lows of the swings are especially important. These points are the basis of deciding the trading direction, trade entries, stop losses, and holding periods.

2. The shifts between longer-term charts and shorter-term charts

Keep an eye on both the charts with longer terms and those with shorter terms, such as the charts with monthly, weekly, daily, hourly, and minute timeframes. Reading from longer ones could provide a view on overall trends, while checking from shorter ones helps decide entry points.

3. Continuation patterns

A continuation pattern suggests that the price will continue to move in the same direction. One could expect low risks but high returns at this point.

4. Reversal patterns

A reversal pattern signals a change in the prevailing trend. Traders should focus on patterns that go against the short-term trend but follow the medium-term trend.

5. The slope of trend lines

While a slope with less than 30 degrees suggests a weak trend, a steeper slope shows a stronger trend. But keep in mind that almost all steep slopes are transformed from flat ones.

6. Cross Currency Pairs & USD-Based Pairs

For those who trade EUR/USD and GBP/USD, it is necessary to eye the DXY and EUR/GBP, as well as to analyze the relationship between them.