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Systematic Forex Charting
Professional traders engage in systematic Forex charting for two reasons. The first is to spot telltale signs of impending market changes. The other reason for systematic Forex charting simply has to do with telling the forest from the trees. We wrote recently about Forex charting with candlesticks. And quite a while back we wrote about following Forex currency rates and keeping things in perspective while trading. The point of systematic Forex charting is to balance the act of trading in a volatile market with a view of the larger market and longer term. With forests, trees and Forex profits in mind let us first consider Forex fundamentals and the larger view for systematic Forex charting.
Knowing Where the Forex Train Is Going
Trend trading is a time honored way to make money in trading currencies. Traders make money by trading within established channels. Using tools like Japanese Candlesticks, traders profit from quick and not always expected market reversals. However, the market has fundamentals and the fundamentals always determine where the market will end up. Having a clear sense of how one currency will eventually trade against another is a key to making repeatedly profitable trades. Professional traders follow the ups and downs of the market but the pros know where things will end up and this gives them a more accurate picture of how prices will evolve. Our comparison to taking a train is appropriate. If you know that the Ruble will likely suffer persistently because of Russian action in the Ukraine you know how to make your trades over the long term. The Forex response to violence in the Ukraine and the subsequent Russian appropriation of the Crimea is a case in point. Knowing where the train of events is going is crucial to long term Forex profits. That is the point of long term systematic Forex charting.