Forex charts are a great resource for evaluating the market and gauging trends, but failure to properly understand them can lead to big mistakes – and big losses. If you don’t understand the indicators or use too many, for example, the forex broker charts can just as easily work against you instead of in your favor.
Here are some of the mistakes beginners tend to make when just starting out as forex traders. By avoiding these, you’ll be able to work smarter instead of working harder and be well on your way to success.
USING TOO MANY INDICATORS
The market never stops changing. It shifts constantly. That’s why attempting to keep up with every little measure in the forex charts is a useless activity – not to mention a waste of valuable time that could be better spent actually trading! Don’t be misled using an infinite number of indicators. Pick a few to keep track of instead of getting lost in a pile of data. In other words, prioritize! Make sure that you completely understand the meaning of the indicators you choose as well.
ONLY USING INDICATORS
It’s wise to remember that the forex charts do not contain a magic formula that will allow you to decode the market. No matter how hard you try to decipher and analyze the indicators on the forex charts, there will always be uncertainty. Use other sources to guide you in addition to the forex charts.
FAILURE TO USE PROPER TIMEFRAME
Your trades must take place within a certain timeframe, and only forex charts that relate to that time period are relevant, including the ones right before and right after whatever timeframe you have established. Using forex charts that aren’t applicable to your particular trade will lead you to base your decisions on the wrong information.
