October 23, 2013
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How to Use Weekly Forex Charts

This article looks at weekly forex charts and how to use them on the forex market.

Using Forex Charts

When entering the forex market, you will discover there are various forex trading tools available for use.  One of the most beneficial tools when conducting technical analysis is the forex chart.  To trade short-term strategies it is advised you utilise the five and fifteen minute charts; however, there are times when the weekly forex charts are more effective and appropriate.  In order to use them efficiently you must know what they are, how to use them, and the difference between them and other charts.

The reasons behind trading with weekly charts

Before using weekly forex charts, you must understand why you are using this chart.  Unlike the five and fifteen minute charts, the weekly chart does not provide an up to date view of the foreign exchange market.  This may cause some wariness among new traders; however, it should not as the weekly chart can be beneficial in other ways.

The primary use of the weekly forex charts is to examine currency pairs.  If you are confused as to the currency pair movement, the weekly chart is the best way to identify its behaviour.  This approach will require more patience; however, you do have a greater chance of profits.

The risks of trading with weekly charts

It is seen that greater profits can be earned with the weekly chart, but this also comes with larger risks.  The primary risk seen is that you can lose as much as you could gain, but then again this is seen among all forex trades.  The positive side of the weekly chart risk is that the time it takes for the trade to reach a profit or loss is prolonged, which allows you time to place either an exit or change parameters.

The differences between the charts

It is important to know the differences between the various charts so that you can choose the most appropriate one for your trading requirements.  If you are utilising the five and fifteen minute charts then you should look at profit ranges of approximately 100-200 pips.  While this may seem substantial, it should be noted that weekly charts can trade up to 1000 or more pips.

Another difference to consider is the length of the trade.  When trading with a weekly chart you will need more patience as the trade will take longer to show a result.  The five or fifteen minute trades are considerably shorter to conduct.

Extra information on weekly forex charts

To be a successful trader you must have a thorough knowledge of all aspects in your trading strategy.  Here is some extra information on the weekly forex chart, if you choose to use it as part of your trading system.

The forex chart is a trading tool, and to use this tool you must look at its moving averages.  These averages will tell you whether you should sell or buy the currency pair you are trading.  It should be noted that while the forex chart can be useful, it must not be utilised as a strategy but as a tool.

 

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